U.S. Investigates Technical Issue That Led to 3-Hour Stoppage at Nasdaq

By ABC News

Aug 22, 2013 6:09pm
ap nasdaq mi 130822 16x9 608 U.S. Investigates Technical Issue That Led to 3 Hour Stoppage at Nasdaq

Seth Wenig/AP Photo

ABC News’ Rebecca Jarvis and Zunaira Zaki report:

A technical problem shut down operations in the Nasdaq for nearly three hours today before trading returned to normal.

“This is not something that I think we have ever seen,” said Art Hogan of Lazard Capital Markets. “There will be times when exchanges will have to halt for a short period of time [but we've] never seen such a large shutdown.”

The glitch affected the stock exchange’s electronic system that links 13 exchanges as well as connects bids and offers, Hogan said. The Nasdaq had to request that trading of its stocks be stopped.

The move hit many companies that most Americans hold in their retirement savings — Google, Apple, Microsoft and Facebook.

Fortunately, when the stock exchange resumed, it closed higher, so while it created a lot of anxiety, it did not hurt savings. The New York Stock Exchange remained open.

“The only silver lining is that it is a slow day,” said Jonathan Caropina of Meridian Equity Partners. “But that is not much of a silver lining. … The bigger issue here is that once again we have a technology fault that is impacting investors big and small. Markets have become too fragmented and too mechanical.”

Law enforcement officials told ABC News that the glitch was not a hack attack or caused by an outside influence.

FBI Director Robert Mueller, however, said that one of the main things that kept him up at night were cyber-threats to U.S. financial markets.

President Obama was briefed today on the shutdown and the Securities and Exchange Commission, the FBI and the Treasury Department are investigating the incident.

Mary Jo White, the SEC chair, called the interruption “serious” and said it should “reinforce our collective commitment to addressing technological vulnerabilities of exchanges and other market participants.”

White said she planned to meet with the leaders of the exchanges and others to “further strengthen” the markets.

“If it were another day, a busier day maybe, we would have had a more significant impact,” Hogan said. “It’s still certainly concerning.”

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