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 The exchange, a unit of Intercontinental Exchange Inc <ICE.N>,
reopened at 3:10 p.m. EDT after being halted shortly after 11:30
a.m. EDT. NYSE said the outage was due to an internal technical
issue and not the result of a cyberattack. Other exchanges were
trading normally.
"It's not a good day, and I don't feel good for our customers who
are having to deal with the fallout," NYSE President Thomas Farley
told CNBC during the halt.
NYSE, which traces its roots back to an agreement under a Buttonwood
tree on Wall Street in 1792, handled 6.12 percent of U.S. stock
volume for the day, with much of that coming after the exchange
reopened, according to statistics from BATS Global Markets. That
compares to an average of about 13.4 percent last month. (For
graphic, see http://reut.rs/1eGZ8fa)
Traders had awaited the reopening anxiously because much of the
NYSE's business happens when portfolio managers put in orders
designed to occur at the exact market close to ensure end-of-day
pricing.
However, many traders said that it did not matter that the NYSE was
down. That's because there are 11 U.S. stock exchanges, including
those run by Nasdaq OMX Group and BATS, along with more than 40
private stock-trading venues, so the trading of NYSE-listed stocks
was uninterrupted.
"This is one of the rare cases where the fragmented markets we live
in actually serve a purpose," said Dave Nadig, director of
exchange-traded funds at FactSet Research Systems. "If this happened
at (the London Stock Exchange), you would just be sitting staring at
a blank screen."
GLITCHES GALORE
NYSE had been experiencing technical issues even before the market
opened. The exchange had said it was experiencing connectivity
problems that may have prevented some of its customers from getting
acknowledgements on orders submitted in some 220 stocks.
NYSE's glitch came on the same day that computer problems led United
Airlines to ground all its flights for about two hours and the home
page of the Wall Street Journal's website temporarily went down.
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The U.S. Department of Homeland Security said there were no signs
that the problems at NYSE and United Airlines stemmed from
"malicious activity." The SEC said on Wednesday that it was closely
monitoring the situation at NYSE. The White House said President
Barack Obama had been briefed on the matter.
Nearly all U.S. trading is done electronically, and the NYSE outage
again raised questions about the robustness of the technology at
exchanges after a raft of major glitches in recent years.
A technical problem at NYSE's Arca exchange in March caused some of
the most popular exchange-traded funds to be temporarily unavailable
for trading. And in August 2013, trading of all Nasdaq-listed stocks
was frozen for three hours, leading U.S. Securities and Exchange
Commission Chair Mary Jo White to call for a meeting of Wall Street
executives to insure "continuous and orderly" functioning of the
markets.
The NYSE accounts for more than 60 percent of S&P 500 volume at the
close of the market, according to Credit Suisse analyst Ana
Avramovic. Most of this is at the "market-on-close," when those
orders are processed for funds and institutions.
"If you don't have all the orders on that marketplace on the close,
the pricing on the close would be definitely not accurate," said
Empire Executions Inc President Peter Costa, who trades on the NYSE
floor.
The benchmark S&P index closed down 1.7 percent on Wednesday, as
investors continue to focus on turmoil in China and Greece.
(Reporting by John McCrank; Additional reporting by Rodrigo Campos,
Jonathan Spicer, Caroline Valetkevitch, Sinead Carew, and Jessica
Toonkel; Editing by Lisa Von Ahn, Bernard Orr)
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