stocks continued to trade hectically Friday
on heavy volumes. The
Dow Jones Industrial Average
slid by more than 200 points, falling into the red for 2010, with traders unhinged by the notion of Europe's solvency issues spreading across the Atlantic.
Friday morning, Nasdaq CEO Bob Greifeld had some stinging criticism for the NYSE. "When you have the primary market -- the listing market -- deciding not to support the stock, to not trade it, to stop trading, that's sending ... a negative signal that there's something wrong with the stock," he said. "So instead of standing behind it, they basically walked away from that. It's equivalent to what happened back in the day when we had telephone markets, where traders didn't answer the telephone to incoming orders."
NYSE chief Duncan Niederauer then went onto the financial news channel to defend his organization.
"I got two observations to Mr. Greifeld's comments," he said. "One is, let's stop the finger pointing. This is about trying to move the ball forward, so let's try to be constructive. Number two: Let's just be clear about what the facts of what happened yesterday were. There's no walking away, there's no abandoning our obligations. We've had a market model in place for years that includes exactly what Bob is advocating for, which is a circuit-breaker, stock by stock."
The NYSE invoked these so-called LRPs (short for "liquidity replenishment point") in a handful stocks on Thursday, including five Dow components and, most notoriously,
Procter & Gamble
(PG - Get Report)
. The LRP shifts trading in individual stocks from electronic clearance to a human auction, which slows the trading down so much that, in effect, the stock is halted.
After calling for a cessation of the war of words, Niederauer on his
spot went on to insinuate that Nasdaq, with its robotic inability to deal with volatile situations, was to blame.
"You take the plane off autopilot sometimes, and you fly the plane," Niederauer said, noting that trading moved to human auction in the LRP stocks for periods of 30, 60 or 90 seconds Thursday afternoon.