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The US stock market lost a measure of trust with traders and investors after computer malfunctions sent the Dow Jones Industrial Average plummeting 178 points in one minute Tuesday.
"The system should be able to handle the capacity when you have high-volume days," said Thomas Garcia at Thornburg Investment Management in Santa Fe, New Mexico. "If I was making decisions based off of bad data, then yeah, I have a huge problem with that."
Dow Jones said its computers were responsible for the sudden nosedive in the 30-stock benchmark about an hour before markets closed because they failed to keep up with trades. The New York Stock Exchange said separately that it experienced "intermittent delays" in prices. Nasdaq Stock Market reported slower distribution of some market data. The two markets handle almost 90 percent of shares traded in the United States.
Some NYSE floor brokers resorted to pen and paper to complete trades, while others scrambled to keep up with orders after an overnight selloff in Chinese stocks spread globally and sparked the biggest US rout in four years. The figure of 3.3 billion shares traded on the Nasdaq was the highest in almost five years. Some 2.4 billion shares traded at the NYSE, the highest volume since June. And it was the busiest day on record at the Chicago Board Options Exchange.
"The extraordinary heavy trading volume caused a delay in our Dow Jones Industrial Average data," said Sybille Reitz, a spokeswoman at New York-based Dow Jones. "As we identified the problem we switched over to a backup system and the result was a rapid catch-up in the public value for the Dow."
Dow Jones alerted stock, futures and options exchanges that rely on the average "pretty early" after noticing the problem, Reitz said. "We switch back and forth between data servers all the time for maintenance reasons, but have never had a delay like this in the reporting of the index," she said.
Trading was smooth early Wednesday with US stocks jumping in volatile trading as all three major stock indexes briefly topped 1 percent.
Story
"The system should be able to handle the capacity when you have high-volume days," said Thomas Garcia at Thornburg Investment Management in Santa Fe, New Mexico. "If I was making decisions based off of bad data, then yeah, I have a huge problem with that."
Dow Jones said its computers were responsible for the sudden nosedive in the 30-stock benchmark about an hour before markets closed because they failed to keep up with trades. The New York Stock Exchange said separately that it experienced "intermittent delays" in prices. Nasdaq Stock Market reported slower distribution of some market data. The two markets handle almost 90 percent of shares traded in the United States.
Some NYSE floor brokers resorted to pen and paper to complete trades, while others scrambled to keep up with orders after an overnight selloff in Chinese stocks spread globally and sparked the biggest US rout in four years. The figure of 3.3 billion shares traded on the Nasdaq was the highest in almost five years. Some 2.4 billion shares traded at the NYSE, the highest volume since June. And it was the busiest day on record at the Chicago Board Options Exchange.
"The extraordinary heavy trading volume caused a delay in our Dow Jones Industrial Average data," said Sybille Reitz, a spokeswoman at New York-based Dow Jones. "As we identified the problem we switched over to a backup system and the result was a rapid catch-up in the public value for the Dow."
Dow Jones alerted stock, futures and options exchanges that rely on the average "pretty early" after noticing the problem, Reitz said. "We switch back and forth between data servers all the time for maintenance reasons, but have never had a delay like this in the reporting of the index," she said.
Trading was smooth early Wednesday with US stocks jumping in volatile trading as all three major stock indexes briefly topped 1 percent.
Story
