Computer errors shook American equity markets again today as malfunctioning software that feeds data between exchanges prompted Nasdaq Stock Market to halt trading in stocks and options.
Nasdaq said in alerts posted on its website that trading on its exchanges had been halted amid issues at its Securities Information Processor, the feed that disseminates stock quotes. The second-biggest stock market operator in the U.S. halted transactions in what it calls Tape C, which comprises all Nasdaq-listed securities.
Buying and selling in many of the country’s most heavily traded shares from Apple Inc. to Intel Corp. and Facebook Inc. ground to a virtual halt after Nasdaq took the action. As of 1:03 p.m. in New York, the Nasdaq 100 equity index hadn’t moved in almost 40 minutes, data compiled by Bloomberg show.
The disruption, coming two days after options markets were roiled by mistaken trades sent by Goldman Sachs Group Inc., is the latest in a series of computer malfunctions that have raised questions about the reliability of electronic markets. Nasdaq came under scrutiny last year when it mishandled the public debut of Facebook, causing millions of dollars in losses for its member firms.
“This is just another one of those headaches that are going on with this electronic stuff,” Frank Ingarra, head trader at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said in a phone interview. “That’s why it is important that you have multiple venues.”
The action froze stocks both on Nasdaq’s platforms and dozens of other markets around the country that trade securities it lists. Companies from Bats Global Markets Inc. in Lenexa, Kansas, to Jersey City, New Jersey-based Direct Edge Holdings published notices saying they were adopting Nasdaq’s halt.
“We are monitoring the situation and are in close contact with the exchanges,” SEC spokesman John Nester said.
Nasdaq said in a 12:59 p.m. update that it intends to re- open trading “at a time to be determined.”
“NASDAQ intends to re-open trading in all Tape C securities with a halt cross with a 5-minute quote only period starting at a time to be determined,” the alert said. ’’NASDAQ will not be canceling open orders on the book. Customers who wish to cancel their orders may do so and any customer who wishes to not participate in the re-opening should cancel their orders prior to the resumption of trading. Additionally, NASDAQ will clear all stale quotes from the UTP SIP prior to the commencement of trading.’’
Earlier, NYSE Arca said that as of 10:46 a.m. it was canceling all live orders in Tape C symbol range TACT through ZYY.C, except for GTCs, or “good til canceled,” orders.
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