Trading on the second-biggest American market operator, Nasdaq, ground to a halt yesterday due to an unexplained technological problem. A computer malfunction stopped all American equity trading, freezing thousands of securities for three hours and raising fresh concerns about the fragility of exchanges. Thursday's outage was the latest high-profile glitch in U.S. stock markets.
Over 3,200 companies from 37 countries ceased transactions shortly after noon, bringing all buying and selling to stop on its platform and dozens of others where the securities trade. Options trading was also halted.
Nasdaq resumed trading at around 3:25 p.m. EDT. Shares affected by the standstill began to change hands again at about 3:25 p.m. in New York and Nasdaq let stand transactions executed between 12:14 p.m. and 12:23 p.m. Open orders were not automatically canceled and customers were told that they could cancel them voluntarily before trading resumed.
Many of the country’s most-traded shares, from Apple Inc. (AAPL) to Intel Corp. and Facebook Inc., ground to a virtual stop as brokers were unable to execute customer orders. Nasdaq equity indexes didn’t update during the outage and volume in stocks listed on the New York Stock Exchange also dwindled as liquidity dried up around the country.
During the shutdown, Nasdaq sent a series of alerts advising clients and traders about the scope of the outage, and later, its plans to resume trading.
Wall Street banks spent the period translating the messages to clients, who were at first panicked, and later frustrated, over how and whether their trades would be processed.
The shutdown was the longest in recent memory, and prompted U.S. Securities and Exchange Commission Chair Mary Jo White to call for a meeting of Wall Street leaders to help insure the "continuous and orderly" functioning of securities markets.
As a result, exchange leaders have been called to Washington for a meeting to “accelerate ongoing efforts to further strengthen our markets” by SEC Chairman Mary Joe White, according to a statement. The mishap was “serious” and efforts to address vulnerabilities should be redoubled, she said.