Business

Technical glitch halts trading on NYSE; other exchanges unaffected

Traders work on the floor at the New York Stock Exchange in New York, Wednesday, July 8, 2015. Later in the morning, technical issues brought trading to a standstill on the floor of the NYSE.
Traders work on the floor at the New York Stock Exchange in New York, Wednesday, July 8, 2015. Later in the morning, technical issues brought trading to a standstill on the floor of the NYSE. AP

The New York Stock Exchange unexpectedly halted trading on all stocks Wednesday morning after experiencing a major technical glitch.

The freeze in trading at one of the world’s largest exchanges is highly unusual. A U.S. official told the Washington Post that there was “no indication” that the problems were the result of a cyberattack. The person, speaking on condition of anonymity, added that the incident “seems like a technical issue.”

Stocks stopped trading just around 11:32 a.m. Eastern. The NYSE said that all orders made during the freeze would be canceled. But trading continued on other exchanges, and Nasdaq officials said at noon that the index’s trading systems were operating normally.

NYSE president Thomas Farley told CNBC that the plan is to reopen the market around 2:45 p.m. or 3:00 p.m., according to various news outlets.

In a statement at 12:10 p.m., NYSE said: “We’re experiencing a technical issue that we’re working to resolve as quickly as possible. We’re doing our utmost to produce a swift resolution & will be providing further updates as soon as we can.”

U.S. markets had dipped slightly before the outage amid worries that falling Chinese stocks would ripple throughout the global economy.

By 12:30 p.m., the S&P 500 had fallen 1.2 percent and the Dow Jones industrial average was down about 1 percent.

Wednesday was a day for technical problems. The outage at the NYSE came just hours after United Airlines temporarily grounded its flights due to what the company said was a “network connectivity issue.” NBC News quoted two unnamed U.S. officials as saying that there was no indication that the market shutdown was related to the grounded airplanes.

And at about the same time as the NYSE freeze, the Web site of the Wall Street Journal went down. The site was back up by 1:30 p.m.

The NYSE problems come at a time when regulators have struggled to cope with the technological revolution that has transformed trading from a human-centric endeavor to one driven by computers.

One of the most harrowing events was the May 2010 “flash crash,” when the stock market plunged nearly 1,000 points in minutes, then whipped back up. Other high-profile glitches gollowed, including the runaway trades linked to faulty computers at Knight Capital in 2012. Technical problems halted trading in Nasdaq-listed stocks for more than three hours in 2013. Facebook’s debut on the Nasdaq exchange was delayed considerably in May 2012 when technical issues marred the company’s initial public offering.

his appears to be the first time the NYSE has halted since June 1, 2005, when trading was stopped four minutes before closing “due to a systems communications problem,”according to the NYSE.

Ted Weisberg, who has traded on the exchange floor for nearly five decades, said his brokerage firm, New York-based Seaport Securities, has been able to keep trading on other exchanges, which were not affected by the glitch.

“It’s not the first time, and it won’t be the last time,” Weisberg said. “You rely on computers, and computers break.”

At the White House daily briefing, press secretary Josh Earnest said homeland security adviser Lisa Monaco and White House Chief of Staff Denis McDonough briefed President Obama on the technical problems at the stock exchange.

He said Monaco told Obama that “at this point there is no indication that malicious actors are involved in these technical issues.” Earnest said NYSE officials have been in close touch with the Department of Homeland Security, the Securities and Exchange Commission and the Treasury Department and that the NYSE is “working feverishly to resolve the situation.” Obama asked his aides to keep him updated through the day on the situation.

More broadly, Earnest said: “the administration is keenly aware of the risk that exists in cyberspace right now. There are a number of steps this administration has taken to improve communication between the private sector and the federal government in terms of safeguarding cyberspace.”

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