Stocks end higher despite Nasdaq system crash

A 3-hour technical problem halts trading in Apple, Microsoft, Amazon.com and other big stocks listed on Nasdaq. The Dow ends a 6-day losing streak.

By Charley Blaine Aug 22, 2013 2:31PM

Stock market © Digital Vision/SuperStockUpdated: 7:05 p.m. ET.

Trading in stocks listed on the Nasdaq system finally resumed late Thursday after a three-hour shutdown. Despite all the excitement about the system failure, stocks ended the day with solid gains.

The Dow Jones industrials ($INDU), in fact, broke a six-day losing streak and ended with a gain of 66.19 points or 0.44%. 

The gains came after the Nasdaq system suffered another big-time system failure, the first since the brokerage system bungled the initial public offering for Facebook (FB) in May 2012.

The Nasdaq system, operated by Nasdaq OMX (NDAQ) crashed at around 12:14 p.m. ET, and trading was halted in all Nasdaq stocks. In addition, other exchanges stopped trading in shares listed on Nasdaq.

More importantly, as The Wall Street Journal observed, the glitch -- and this may be understating the issue -- raises questions about the "the robustness of U.S. trading systems."

Nasdaq had said it would reopen its system at 2:30 p.m. ET with the first 15 minutes a quote-only period, allowing traders to see where stocks, options and the market stood. Limited trading was to start thereafter. Quotes on all other listed stocks became available at 3:10 p.m. for an additional 15-minute quote-only period with all trading resuming at 3:25 p.m.

Customers who had wanted to cancel their orders were allowed to do so, Nasdaq said. Any customer who did not wish to participate in the reopening was to cancel orders before trading resumed.

The system disruption affected the calculation of just about any index that included Nasdaq-listed stocks.

The Dow includes three: Microsoft (MSFT), Intel (INTC) and Cisco Systems (CSCO).

About 22% of the stocks in the Standard & Poor's 500 Index ($INX) are Nasdaq-listed stocks, including Apple (AAPL), Microsoft, Intel, Cisco, Google (GOOG), Amazon.com (AMZN), Dell (DELL), Starbucks (SBUX), Yahoo (YHOO) and Netflix (NFLX).

Apple shares tumbled to $498.26 from $501.92 between 11:45 a.m. ET and noon. For nearly two hours, the quote was $498.53. After trading resumed, the shares closed up 51 cents to $502.87.

At the time trading was halted, the Nasdaq Composite Index ($COMPX) was up 31 points to 3,631. The Nasdaq-100 Index ($NDX) had gained 23 points to 3,095. After trading resumed, the Nasdaq closed up 39 points to 3,639. The Nasdaq-100 finished up 30 points to 3,102.

Nasdaq OMX shares closed down $1.08 to $30.46. Despite Thursday's turmoil, the shares are up 21.9% for the year.

The Dow's gain was its first after six straight losses. The S&P 500 and Nasdaq were up for only the second time in seven sessions.

Nasdaq said the shutdown was related to issues at its Securities Information Processor. That's the feed that disseminates stock quotes to other exchanges. Its order intake system worked fine, but Nasdaq couldn't get prices out.

Why the crash occurred was unclear. There was some speculation -- perhaps in jest -- that a tweet by corporate raider Carl Icahn that he will have dinner with Apple CEO Tim Cook next month may have set off a big volume of trading.

The disruption, which came two days after options markets were roiled by mistaken trades sent by Goldman Sachs (GS), was the latest in a series of computer malfunctions that have raised questions about the reliability of electronic markets.

Nasdaq came under intense scrutiny last year when a computer malfunction disrupted the public debut of Facebook. The disruption led to tens of millions of dollars in trades being wrongly placed. Nasdaq faced fines and considerable litigation from the debacle. Facebook shares subsequently fell to 50% of their IPO price before gradually rebounding in recent months.


Financial markets trading has been disrupted with some regularity as computerization and deregulation have made networks increasingly complex.

The most shocking disruption was the May 2010 "flash crash" that saw the Dow plunge about 1,000 points (about 9%). The losses were recovered within minutes.

Thursday's market rally was led by energy, industrial, materials and financial stocks. United Technologies (UTX), 3M (MMM) and Boeing (BA) were the Dow leaders; Hewlett-Packard (HPQ), which missed estimates in its Wednesday night earnings report, was the laggard, down 12.5%. The loss trimmed 25 points off the blue-chip index.

Gamestop (GME), coal-producer Peabody Energy (BTU) and iron-ore-producer Cliffs Natural Resources (CLF) led the S&P 500. A total of 453 S&P 500 stocks were higher. The laggards were Abercrombie & Fitch (ANF) and Hewlett-Packard were the laggards.

Abercrombie missed estimates badly. The problem, said retail consultant Robin Lewis, is that the demographic group the company targeted years ago has moved on. New buyers now want fast fashion and "preppy."

Tesla Motors (TSLA) and Yahoo (YHOO) led the Nasdaq-100. Ninety-two stocks in the index were higher. Sears Holdings (SHLD) was the laggard.

The 10-year Treasury yield rose to 2.89% from Wednesday's 2.86% after reaching a 52-week high of 2.92%. Rates have been rising since May when talk of tapering the Federal Reserve's bond-buying program, or quantitative easing, began.

Crude oil (-CL) in New York settled up $1.18 to $105.03 a barrel. It's unchanged for the month. Brent crude added 9 cents to $109.90; its August gain is 2%.

Gold (-GC) added 70 cents to $1307.80 an ounce. It's up 4.4% this month.

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32Comments
Aug 22, 2013 2:49PM
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The IT department was busy with their fantasy football draft at the time. The draft is over now so things should be back up shortly.

Aug 22, 2013 2:43PM
Aug 22, 2013 3:20PM
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There must have been a glitch in the Matrix
Aug 22, 2013 4:05PM
Aug 22, 2013 3:24PM
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MORE MANIPULATION HUH...lol.. I can't wait till this PONZI scheme is EXPOSED
Aug 22, 2013 4:19PM
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When President Obama was asked about the outage and hacking of the NASDAQ

 

He replied... it's only a minor glitch that will only effect a few million people and should only account for a few billion dollars in loses to those terrible rich folks..  He continued by saying everybody should light up a joint... take some free Obamacare drugs and chill out... We'll print more money tomorrow.

Aug 22, 2013 4:48PM
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WOW... yesterday they tried to QE the Dow back up around 3pm and watched that whole investment disappear and it TANK 105 points down. Today they put it up early and made sure nothing forced the Dow down the rest of the day. Check the Chart out-- out of the gate to 58, finished up 66. If that isn't genuine corruption steering the markets, I don't know what is... and YOUR hard-earned money is STILL in there? Why?
Aug 22, 2013 3:19PM
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Still looks like 3631 to me, up about +0.87%.    hmmmm?
Aug 22, 2013 10:33PM
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wow another glitch??? lot of that goin' on lately and here's one more from your black phony American Dream destroyin' messiah:

While speaking at the University at Buffalo on his nonsensical plan for a new government rating system for colleges and universities, (which thanks to the democrapic party tuition is now DOUBLED!).... President Barack Morana Stupida Dumber-than-a-box-of-CrackerJacksa Obama caught a bit of flak from the crowd when he flubbed the name of the city's mayor....and you wonder why he doesn't let you see his college transcripts.....well how can you give flak to a man who's been to 57states?? and one more to go...hmmm wonder if he ever went to that one...anyway...seriuosly libs this is your idea of a genius? this Marxist Dumb OX makes you proud? you guilt-ridden libs, really? feelin' better now?? your guilt assuaged a little bit, ?? hmmm? or are you AS I SUSPECT feel SOOOOOOOOOOOOOOOOO STUPID now that you'd never admit that to yourselves much less anyone else!! but I digress....oh and you've got 3 more years of this shyt!! in case I forgot to mention it...ok now I digress.....

you don't say?? well the man's got the IQ of 8 at best....and I'm givin' him 7pts....anyway  for more laughs just watch obama off teleprompter on youtube never get tired of watchin' the lib's idea of the smartest most intelligence 'black' guy on Earth!! a Constitutional lawyer that knows DICK 'bout the Constitution! but an expert and circumventing and destroying it....how's that for a glitch!
Aug 23, 2013 1:20AM
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 Not even a glitch can stop Big Ben's welfare collectors thanks Obozo you rock!
Aug 22, 2013 11:26PM
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Simply an accident, to make sure all the rich got there bets in before the next behind the scheme scam.

 

Americans should be out on the streets at camp at Wash DC lawn for 6 Months to get the message across. (Egypt got balls) No will power or intestinal fortitude by all the Middle & Left so you get what you deserve, the "R"  have bigger nuts. Someday the left will grow a set and unite, until then since Bush II, you all deserve everything you get.

 

If the "D" do not capture the 2014 house & Senate say goodbye to what's left of this joke called USA, 2 trillion in corporate assets siting in Camen Inlands, was a day when the corporate pigs invested in USA.

 

No moral fiber left between right and wrong, poor people fighting unjustified wars, bring back the draft and make every Senator/Congressman's daughters & sons go to Afghanistan.

 

Could go on but I am wasting time need to get to my second job. 

Aug 22, 2013 3:12PM
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Wait until the "Glitch" that causes a "Halt" and you watch your life savings evaporate at the "Reopening". As Calvera said in "The Magnificent Seven"......"if God had not wanted them shorn, He would not have made them sheep".
Aug 22, 2013 6:37PM
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I think they took a post of mine down.....hmmm??

Can't say anything about the IT guys?...hmmm ?

Glad they got their poop together....

Eliminate HFT....Maybe that will help..?

1st. Amendment, what...?

Aug 22, 2013 3:23PM
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A ton of losses anyways so whats wasting more money and tossing it away.
Aug 22, 2013 3:57PM
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Not to worry. This sort of thing happens all the time on the Parador Exchange.
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ITS NOT CLEAR?

CRIMINALS=CAPITALISM=OLIGARCHY=PLUTOCRACY

The REAL terrorists of COURSE ARE wall street, banking, criminal ruling class and the criminal private sector..


The prerequisite for the nationalization of the banks and their subordination to the needs of society is an independent political movement of the working class on the basis of socialist policies. It is a question of state power.

 No capitalist government can or will carry out this task. What is required is a political and revolutionary struggle to establish a workers’ government.

What is required is a coordinated offensive by the international working class on the basis of a socialist and revolutionary program that aims to reorganize the global economy to meet social needs rather than the profit imperatives of the various national elites.


Remember , the ruling class will be dining on caviar when the **** hits the fan with money they stole from YOU......... and you and YOURS will be eating grass>..!

Sad but true.. grovel then sheeple.... grovel...

1.  rule by the wealthy: the rule of a society by its wealthiest people 
2.  society ruled by the wealthy: a society that is ruled by its wealthiest members 
3.  wealthy ruling class: any wealthy social class that controls or greatly influences the government of a society 

Aug 22, 2013 3:24PM
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Unacceptable - traders thought it was terrorism and indexes fell.
Aug 22, 2013 3:21PM
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We have 1 limit sale in, doubt it will fill for a day or so anyway.?
Aug 22, 2013 3:45PM
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Why did they bother? Why wouldn't they just post the share of QE pumping them up and shut the rest of the place down? These are VERY dark days for America... no longer the Land of the Free and Home of the Brave... now the Land Indentured to QE Obligation and Home of the Overpaid Psychopaths. Go home Obama... people can ask you to help by intervening EVERYDAY and all you do is play hoops with your security staff and Twit Hollywood. You don't take down Ivory Towers by knocking on their doors and asking them to knock it off.
Aug 22, 2013 3:09PM
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Perhaps it was an internal glitch and both cause and solution have been documented by the exchange's IT guys.

 

Perhaps it was hackers and neither they nor a preventive fix have been identified.

 

Whichever it was: "It was an internal glitch. We fixed it and it won't happen again."

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