Nasdaq Market Overcomes Trading Failure

Updated, 3:42 p.m. | Trading in a wide array of stocks, including popular ones like Apple and Microsoft, ground to a halt on Thursday after a technology problem at the Nasdaq stock exchange. It was the latest prominent disruption in the markets caused by computer glitches. Nasdaq first sent out an alert at 12:14 p.m., telling traders that it was halting trading in all stocks listed on the Nasdaq exchange until further notice. The exchange said the issue was a result of problems with the system on which trades are recorded. Trading was also halted on all Nasdaq options markets. Nasdaq began reopening stocks for trading soon after 3 p.m. and was racing to get all of its systems back in operation as the trading day drew to a close. During the halt, nearly every trading firm on Wall Street scrambled to determine what to do with orders for Nasdaq-listed stocks. “There is no transparency for investors at this point,” said David Warhoftig, managing director of Highside Capital Management. “We were able to potentially get a few trades done when this first started, but now we are not able to do anything.” Under normal conditions, if an exchange has problems, traders can direct their orders to other public exchanges. But because the problems involved the data feed from which prices are derived, all exchanges stopped trading Nasdaq stocks on Thursday. A day before the incident, there was a total of $48 billion of trading in Nasdaq listed stocks, according to data from BATS Global Markets. The breakdown appears to be one of the most significant technology problems to hit a trading world that has become accustomed to glitches. Earlier this week, Goldman Sachs sent out a barrage of erroneous options trades that briefly crippled the market. For Nasdaq, the trading halt has brought back painful memories of the botched debut of Facebook shares in May 2012, a closely watched initial public offering that was marred by a delayed start and “technical errors.” Nasdaq paid a $10 million fine as a result of that incident and said it had extensively reworked its technology systems and testing. On Thursday, traders complained that Nasdaq was providing few details on what had happened and how the problems would be resolved. Jonathan Corpina, a stock trader at Meridian Equity Partners on the floor of the New York Stock Exchange, said that he had many clients calling him “looking for answers and explanations because they can’t get through to the Nasdaq on the phone.” Nasdaq’s own stock was not trading on Thursday afternoon because it is listed on its exchange. That made it hard to immediately gauge how much the outage might hurt the company. But market participants said there is likely to be significant fallout for the company.