Thursday, December 5, 2013
The Associated Press
NEW YORK - A mysterious technical glitch halted trading on the Nasdaq for three hours Thursday in the latest major electronic breakdown on Wall Street, embarrassing the stock exchange that hosts the biggest names in technology, including Apple, Microsoft and Google.
A television displays news about the Nasdaq on the Nasdaq building in New York on Thursday. Nasdaq halted trading Thursday because of a technical problem, the latest glitch to affect the stock market.
The Associated Press
The problem sent brokers racing to figure out what went wrong and raised new questions about the pitfalls of the electronic trading systems that have come to dominate the nation's stock markets.
Nasdaq said only that the problem lay in its system for disseminating prices. An investigation was under way.
The outage disrupted what had otherwise been a quiet summer day on Wall Street. It was another in a series of technical problems to disrupt financial markets, although less alarming than the "flash crash" that set off a stock market plunge in May 2010.
"The market has gotten quite complex and needlessly so," said Sal Arnuk, co-founder of the brokerage Themis Trading.
The Nasdaq, a stock exchange dominated by some of the largest, most prosperous technology companies, sent out an alert shortly after noon that said it would stop trading. The Nasdaq composite index spent much of the afternoon stuck at 3,631.17.
Trading resumed at 3:25 p.m. Thirty-five minutes later, the day ended with the index up 38 points, or 1 percent, at 3,638.71.
Investors are not at risk of losing any money from these glitches unless they are unlucky enough to be buying or selling a stock at the exact moment when an error occurs, forcing them to cancel their trades.
"Clearly it's an annoyance, but it doesn't in any way affect the value of your underlying assets," said Marty Leclerc, chief investment officer at Barrack Yard Advisors, an investment adviser.
"Warren Buffet used to say that if you own a stock you ought to be comfortable with it even if the market were to close for a year," Leclerc said.
During the outage, the Nasdaq said it wouldn't cancel any orders stuck in limbo, but that customers were free to cancel their orders before trading resumed.
The shutdown did not upset other parts of the stock market. But one stock that did take a hit was the parent company of the exchange, Nasdaq OMX, which fell $1.08, or 3.4 percent, to close at $30.46 in heavy trading.
Brad McMillan, chief investment officer of the independent brokerage Commonwealth Financial, said competition between rival exchanges for customers was partly to blame. The exchanges try to bring in more business with the promise of faster trading, which makes them more reliant on new technology.