SelectNet Slowdown Affects Investors Big and Small

Luddites' Delight, Traders' Fright

SAN FRANCISCO -- After seven consecutive record closes, the fact the Nasdaq Composite Index (along with the other averages) fell today shouldn't be a shock. But in the afterglow of the Comp's latest run to glory come reports of problems within the exchange itself. Ironically, considering the Comp was built on the dazzling performance of tech stocks big and small (vs. say, rock and roll), the problems are technological in nature.

Specifically, I'm talking about SelectNet, an automated trading service that enables broker/dealers to trade with each other electronically. On Oct. 6, a "general slowdown" in the system affected three electronic communication networks, or ECNs, for several hours, resulting in their quotations being temporarily withdrawn, the Nasdaq-Amex said in a press release.

Nothing that serious has been reported of late, but traders say there's been a nettlesome increase of sluggishness in the system. ...