The New York Stock Exchange shut down its main market because of a computer malfunction, forcing traders to steer orders elsewhere in the biggest disruption to an American equity venue in almost two years.
The suspension, announced to securities firms through notices on the NYSE website around 11:32 a.m. in New York, dropped the largest U.S. share platform out of the network of trading platforms that make up the American equity market. That network kept running, however, as exchanges such as the Nasdaq Stock Market and Bats Global Markets Inc. picked up the runoff.
“We’re currently experiencing a technical issue that we’re working to resolve as quickly as possible,” Marissa Arnold, an NYSE spokeswoman, said in an e-mailed statement. “We will be providing further updates as soon as we can, and are doing our utmost to produce a swift resolution, communicate thoroughly and transparently, and ensure a timely and orderly market re-open.”
Two people with direct knowledge of the matter said just before 2 p.m. that the breakdown, which affected two of three venues operated by NYSE, was repaired and the exchange was working to reopen.
While rare, computer breakdowns in electronic markets have become an unavoidable fact of life for American investors operating in markets that have sped up and fragmented over the past decade and a half amid computer advances and regulation. NYSE’s breakdown came two years after the Nasdaq Stock Market was forced to halt trading in its shares for three hours because of a broken price feed.
“I don’t think it’s a hacking incident here or anything like that,” Joe Saluzzi, co-head of equity trading at Chatham, New Jersey-based Themis Trading LLC, said by phone. “Based on what I’ve seen in the past, these type of things are usually some sort of issues related to an upgrade, maybe to handle the excessive traffic that’s constantly coming in with high-speed trading.”
The stock exchange operator said in a Twitter message the issue is internal and not a “cyber breach.” The Securities and Exchange Commission is closely monitoring the situation, according to an e-mailed statement from Chair Mary Jo White.
While the NYSE’s rupture sowed anxiety and stirred memories of past breakdowns such as the May 2010 flash crash, it also highlighted the resilience of a system where no one exchange handles more than 16 percent of transactions. Both Nasdaq and Bats said their venues were operating as normal during the outage.
“You can still execute NYSE stock,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee. “Other venues are still available. Dark pools are still available,” he said. “If a client called up and wanted me to execute a trade I could still do it.”
NYSE’s action came after it sent a series of notices earlier in the day that, prior to the suspension, appeared routine. At 10:37 the unit of Intercontinental Exchange Inc. told traders that it had resolved an issue that may have prevented customers from receiving acknowledgement of orders submitted before 9:30 a.m.
At 11:04 a.m. it reported “a reported technical issue,” without elaborating.
The NYSE is one of 11 exchanges and more than 50 private venues where American stocks change hands. While today’s issue affected transactions on the company’s main market and impacted indexes derived from prices generated by that venue, investors could still buy and sell stock elsewhere.
The NYSE plays a dual role in the U.S. equity market, acting as a venue on which investors buy and sell shares and also in an administrative and listing capacity that oversees two of the three official price feeds for American stocks. Those feeds, known as Tape A and Tape B, continued to operate.
“For the most part the system is muddling along, relatively normally,” said Steve Sosnick, an equity risk manager at Timber Hill, the market-making unit of Greenwich, Connecticut-based Interactive Brokers Group Inc. “There’s no shortage of other places that are open and trading at this point.”
Sosnick said the firm was tweaking its order routing but beyond that “things are relatively normal.”
“We’re getting price information from other venues,” Sosnick said. “We haven’t come to a halt by any means and the options exchanges are up.”
A U.S. Department of Homeland Security official, who spoke on condition of anonymity, said there was no indication so far that the NYSE had been hacked.
While the halt recalled the August 2013 outage in Nasdaq- listed securities, when a ruptured price feed forced the exchange to stop trading in more than 2,000 listings for several hours, its immediate impact was not as great because trading continues today on other venues. That event caused SEC Chair White to call the heads of all the public equities exchanges to stress the importance of stability in U.S. markets.
–With assistance from Callie Bost in New York.
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