NYSE trading halted for 80 minutes by glitch

NYSE trading halted for 80 minutes by glitch

NYSE calls time out

By Staff Writer Catherine Tymkiw

June 8, 2001

NEW YORK (CNNfn) -- Trading took an unscheduled 80-minute break Friday morning at the New York Stock Exchange as activity was halted when an overnight software upgrade resulted in no transactions for many NYSE-listed stocks.

The halt began at about 10:15 a.m. ET, 40 minutes after the market open. The opening bell was rung for the second time at 11:35 a.m.

An exchange spokeswoman told CNNfn that about half the issues on the world's largest stock exchange were delayed or didn't open. Even after the halt, some stocks struggled to catch up.

IBM (IBM: down $1.00 to $116.25,), for example, was trading in a wide range of $100 to $137. LSI Logic (LSI: down $0.51 to $22.25,) was trading from $2 to $42.

Still, analysts cheered the NYSE decision to resume trading as soon as possible.

"Because it wasn't a major news day, per se, it was also smart to open as quickly as possible," said Charles Payne, president of Wall Street Strategies. He said this wasn't a huge cause for concern but cautioned that if problems such as these persist, it may forge some type of trend.

"I don't think this raises any red flags," said Payne. "It's an intriguing thing but it happens to everybody. Everyone knows that the implementation of software can get tricky."

Chairman and CEO Richard Grasso told CNNfn's Market Call that the NYSE makes about 200 to 300 software changes each year and has not had a problem since 1998. But he also made it clear that this was not a problem with the software vendor.

"We're constantly making changes to our systems to make things better for our customers," Grasso said. "This is not a problem with the software vendor, this is a problem with the NYSE and the buck stops here."

The NYSE, the largest equities marketplace in the world, is home to about 3,000 companies worth more than $17 trillion in global market capitalization. As of yearend 2000, the NYSE had 313.9 billion shares listed and available for trading valued at approximately $12.37 trillion.

The software glitch allowed institutional trades to be processed, but retail trades could not, and Grasso said, "Half of our floor was not receiving electronic traffic, and we thought that was not fair."

Within 45 minutes of resumed trading, volume showed 199 million shares changing hands with declining issues still ahead of advancing ones 1,549 to 824. When trading halted around 10:15 a.m., volume showed a very light 63 million shares traded on the NYSE, with declining issues ahead of advancing ones 653 to 505.

Originally, posts 1-8 were not trading, including many stocks that are also components of the Dow Jones industrial average. Four Dow components did not record any trades.

But the Dow still fluctuated because two of the 30 issues, Intel (INTC: down $0.74 to $30.40,) and Microsoft (MSFT: down $1.25 to $72.43,), are Nasdaq-listed.

Traders were not overly concerned by the computer problem. "Technical glitches happen, and when you live in a technological world, this kind of thing is going to happen," said Peter Coolidge, senior trader with Brean Murray & Co. "You can run all the tests you want but there's no substitute for the real thing."