Trading Starts Again on NYSE After Technical Problems - TheStreet

Trading Starts Again on NYSE After Technical Problems

The New York Stock Exchange had to halt trading for more than an hour because of computer trouble. The Dow is lower.
Author:
Publish date:

(Updated from 10:33 a.m. EDT)

Trading on the

New York Stock Exchange was halted for more than an hour this morning because of system problems. Officials there expected the exchange to resume trading at 11:15 a.m. EDT, but then pushed that back to about 11:35 a.m. EDT.

Ten percent of stocks were affected even after the market resumed trading.

Trading difficulties began almost immediately after the opening bell, with more than half the stocks on the exchange affected. At approximately 10:10 a.m., the exchange halted all trading on NYSE stocks. According to officials there, the exchange had temporarily lost connectivity between its system's computers and the trading floor.

Just 64 million shares traded on the New York Stock Exchange prior to the shutdown. By 10:30 a.m., more than 400 million shares had traded on the

Nasdaq Stock Market. But volume on the Nasdaq slowed as investors waited for the NYSE to reopen.

NYSE officials said they could have let trading continue on the NYSE with "other than systemic traffic," meaning, orders that weren't coming through the computer, but "we did not feel this was fair to the retail investor," officials said in a statement. (This action would have allowed trading by phone, but liquidity and efficiency would have suffered.)

Trading on regional exchanges is technically allowed during these types of situations, but officials at both the

Chicago Stock Exchange

and

Philadelphia Stock Exchange

said they halted trading in NYSE stocks because of the problems at the NYSE. Both those exchanges, however, continued to trade

American Stock Exchange

- and Nasdaq-listed stocks, however, and said they would resume trading in NYSE stocks when the NYSE reopened.

A number of stocks on the Dow didn't open on the NYSE at all this morning, including

ExxonMobil

(XOM) - Get Report

and

Eastman Kodak

(EK)

.

Some stocks did trade this morning, such as

Merrill Lynch

(MER)

. It never opened on the NYSE and the last Merrill quote was from the Chicago exchange.

Traders weren't overly concerned about facing problems once the NYSE resumed trading. Some minor imbalances may occur when trading resumes, traders said, but completing orders that weren't completed earlier this morning shouldn't be a problem. The stocks that never opened at all shouldn't have any problems -- it'll be sort of like the trading day began late for those stocks, sort of like a delayed opening at elementary school.

"Just like any halt, you'll go back into an opening, meaning, you'll match the buy and sell orders, and have an opening price and then trade again," said Pete Blatchford, trader at

Miller Tabak

. "Something that never opened, you'll probably just get it open, and it shouldn't be too disruptive."

Coffee Break

Outside the exchange during the halt, groups of traders, variously attired in their blue, green, red and navy jackets, were banding together, for once outnumbering the throngs of tourists. Just about all of the traders were dragging on cigarettes, waiting for the reopen.

By about 11:10 a.m., they'd filed back inside, anticipating the reopen, leaving just the skyward-gazing visitors. Other souls in the offices were already thinking about the weekend, one suggesting somewhat desperately that "we should just go home." A few others filled out orders for Nasdaq stocks, which continue to trade.

Prior to the outright halt on the exchange, brokerages were relying on the telephone to make trades because the quote feed from NYSE vendors wasn't working. Regional exchange volume declined quickly, because as one trader put it, most people want to see the most reliable quotes, which appear on the NYSE.

The Dow was lately down 35 points, and was moving around a bit because of the continued trading in Nasdaq stocks

Microsoft

(MSFT) - Get Report

and

Intel

(INTC) - Get Report

. But the overall quote for the index doesn't accurately reflect the current price of its 30 stocks.

The Dow was lately down 119.59, or 1.08%, to 10,971.15.