The American equity market was troubled by a computer breakdown which eventually led to a massive technical glitch. The error prompted the Nasdaq stock market to put a halt on the trading which involves thousands of options and stocks.
In an official statement, Nadaq stated that the three-hour pause resumed by 3:25 pm prior to a 15-minute quote-only activity. The shares that Nasdaq lists in their live database was stopped due to the issues of their Securities Information Processor, which is responsible for feeding the data on quotes and prices. NasDaq is the second biggest stock market operator in the US. The halt compromised the whole stock market system particularly those companies who have NasDaq-listed securities and bonds.
The sudden pause of the stock market affected many popular companies such as Apple Inc, Facebook Inc, and Intel Corp. Buyers and sellers of stocks from Cisco Corp and Microsoft Corp were also affected.
The disruption, seen as untimely by many, happened just two days after Goldman Sachs Group mistakenly sent market trades into the market system. Goldman attributed the error to another technical glitch. The two events, although unrelated, has sparked the debate about the credibility and reliability of electronic-dependent markets. Last year, NasDaq faced the same criticism when they mishandled the debut of Facebook stocks, causing its member firms to waste millions of dollars.
A trader from NorthCoast Asset Management LLC, which is based at Connecticut, described the fiasco as another "headache." Frank Ingarra said, "This is just another one of those headaches that are going on with this electronic stuff. That's why it is important that you have multiple venues"
The technical glitch issue's occurrence happened coincidentally with the growing complexity of the financial markets which have been crossing international borders since 2000. Altough NasDaq promised that errors like these will be prevented in the future, some stay cynical and are worrying about the current stock market technology's influence over the exchange process itself.
For more information, here is a Youtube video regarding the issue:
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