Arab Today, arab today tech glitch halts nasdaq trade for 3 hours
Last Updated : GMT 06:37:29
Arab Today, arab today
Arab Today, arab today

Tech glitch halts Nasdaq trade for 3 hours

Arab Today, arab today

Arab Today, arab today Tech glitch halts Nasdaq trade for 3 hours

New York - AFP

An unexplained technology glitch on Thursday shut down trade on the Nasdaq for more than three hours, an unprecedented halt on the second-largest US stock exchange. Nasdaq OMX, the operator of the tech-rich Nasdaq Stock Market, halted trade around 12:15 pm in all \"Tape C\" securities, which includes options and securities, citing a problem with its system for interfacing with other exchanges on stock quotes. The suspension came on the heels of other recent problems with electronic trading processes and could lead to tighter regulations on exchanges. The Nasdaq Composite Index rose one percent in spite of the debacle, but analysts said such a mishap could have serious consequences for markets during busier news periods. \"Any time you see this kind of thing, it always brings the question of market integrity,\" said Michael Gayed, chief investment strategist at Pension Partners. \"Whenever you have a technical glitch, it is not comforting for people to put their money in.\" Full trading resumed around 3:25 pm (1925 GMT). A Nasdaq statement released late Thursday said Nasdaq had halted trading after learning that price quotes were not being disseminated by the Securities and Industry Processor (SIP), which distributes prices to other exchanges. Nasdaq said it had resolved the technical issues in the first 30 minutes, but spent the remainder of the time coordinating with other exchanges, market participants and regulators organizing the resumption of trade. \"NASDAQ OMX will work with other exchanges that are members of the SIP to investigate the issues of today, and we will support any necessary steps to enhance the platform,\" Nasdaq said. The suspension froze prices on big technology stocks like Apple, Google and Facebook as well as the value of the Nasdaq index. The Nasdaq index was up 31.38 (0.87 percent) at 3,631.17 when trading was halted. The index briefly plummeted about 5 percent, before quickly recovering. It ended the day 38.92 (1.08 percent) higher at 3,638.71. Shares in parent firm Nasdaq OMX Group fell 3.4 percent. The glitch promises to increase scrutiny on Nasdaq, which came under fire following technical difficulties with Facebook\'s initial public offering in May 2012. After the Facebook fiasco, Nasdaq paid the Securities and Exchange Commission a $10 million penalty, following a series of missteps that included a design glitch in Nasdaq\'s system to match IPO buy and sell orders. An SEC spokesman said the US securities regulator was monitoring the situation and was \"in close contact with the exchanges.\" President Barack Obama and Treasury Secretary Jacob Lew were briefed on the issue, officials said. Only earlier this week, the New York Stock Exchange said it was cancelling a series of faulty Goldman Sachs options trade. Knight Capital Group last year lost $440 million due to a software glitch that caused mistaken buy and sell orders, roiling markets. The shutdown came on a quiet day for Nasdaq, with no major economic news events or earnings from major Nasdaq companies. \"We\'ve had low volumes and light liquidities, that is just the nature of the summer,\" said Steven Rosen, a vice president at Societe Generale. But Rosen said he was concerned about what would happen in a busier period. \"We could see wild swings,\" Rosen said. \"It could be bad for the market. (It) could cause a crash up or down.\" Because other exchanges could not see price quotes from Nasdaq, those that trade Nasdaq-listed stocks, such as the New York Stock Exchange, could not continue to trade Nasdaq stocks. Art Hogan, head of product strategy at Lazard Capital Markets, said the halt was \"frustrating, but you don\'t lose any money. You just lose time.\" He said the stoppage was unprecedented. \"I\'ve never seen an entire exchange shut down for 1 1/2 hours for technical issues during the middle of the day,\" Hogan said earlier in the afternoon.

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