Investors were forced to steer orders away from the
New York Stock Exchange as the biggest U.S. share venue halted trading to fix a computer malfunction.
The suspension, announced to securities firms through notices on the NYSE website around 11:32 a.m., dropped the biggest U.S. share platform out of the interconnected network of venues that make up the American equity market. That network continued to operate, however, as other exchanges such as the Nasdaq Stock Market and Bats Global Markets Inc. picked up the runoff.
“We're currently experiencing a technical issue that we're working to resolve as quickly as possible,” Marissa Arnold, an NYSE spokeswoman, said in an e-mailed statement. “We will be providing further updates as soon as we can, and are doing our utmost to produce a swift resolution, communicate thoroughly and transparently, and ensure a timely and orderly market re-open.”
(More: Exchange issue strikes Merrill Lynch, Vanguard ETF performance)
While rare, computer breakdowns in electronic markets have become an unavoidable fact of life for American investors operating in markets that have sped up and fragmented over the past decade and a half amid computer advances and regulation. NYSE's breakdown came two years after the Nasdaq Stock Market was forced to halt trading in its shares for three hours because of a broken price feed.
“I don't think it's a hacking incident here or anything like that,” Joe Saluzzi, co-head of equity trading at Chatham, N.J.-based Themis Trading, said by phone. “Based on what I've seen in the past, these type of things are usually some sort of issues related to an upgrade, maybe to handle the excessive traffic that's constantly coming in with high-speed trading.”
The stock exchange operator said in a Twitter message the issue is internal and not a “cyber breach.”
AMERICAN EXCHANGES
Kevin Callahan, a spokesman for the Securities and Exchange Commission, declined to comment.
NYSE's action came after it sent a series of notices earlier in the day that, prior to the suspension, appeared routine. At 10:37 the unit of Intercontinental Exchange Inc. told traders that it had resolved an issue that may have prevented customers from receiving acknowledgement of orders submitted before 9:30 a.m.
At 11:04 a.m. it reported “a reported technical issue,” without elaborating.
The NYSE is one of 11 exchanges and more than 50 private venues where American stocks change hands. While Wednesday's issue affected transactions on the company's main market and impacted indexes derived from prices generated by that venue, investors could still buy and sell stock elsewhere.
“You can still execute NYSE stock,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W.
Baird & Co. in Milwaukee. “Other venues are still available. Dark pools are still available. It certainly affects pricing of the Dow.”
The NYSE plays a dual role in the U.S. equity market, acting as a venue on which investors buy and sell shares and also in an administrative and listing capacity that oversees two of the three official price feeds for American stocks. Those feeds, known as Tape A and Tape B, continued to operate.
'MUDDLING ALONG'
“For the most part the system is muddling along, relatively normally,” said Steve Sosnick, an equity risk manager at Timber Hill, the market-making unit of Greenwich, Conn.-based Interactive Brokers Group Inc. “There's no shortage of other places that are open and trading at this point.”
Mr. Sosnick said the firm was tweaking its order routing but beyond that “things are relatively normal.”
“We're getting price information from other venues,” Mr. Sosnick said. “We haven't come to a halt by any means and the options exchanges are up.”
A Department of Homeland Security official, who spoke on condition of anonymity, said there was no indication so far that the NYSE had been hacked.
While the halt recalled the August 2013 outage in Nasdaq-listed securities, when a ruptured price feed forced the exchange to stop trading in more than 2,000 listings for several hours, its immediate impact was not as great because trading continues today on other venues. That event caused SEC Chair Mary Jo White to call the heads of all the public equities exchanges to stress the importance of stability in U.S. markets.
