09 Jul The Stock Market Bell Rings, Computers Fail, Wall Street Cringes
Problems with technology have at times roiled global financial markets, but the 223-year-old New York Stock Exchange has held itself up as an oasis of humans ready to step in when the computers go haywire.
On Wednesday, however, those working on the trading floor were left helpless when the computer systems at the exchange went down for nearly four hours in the middle of the day, bringing an icon of capitalism’s ceaseless energy to a costly halt.
The exchange ultimately returned to action shortly before the closing bell, and stocks continued trading throughout the day on other exchanges, like the Nasdaq and BATS Global Markets.
The disruption nonetheless rattled investors, who already had reason to be on edge, considering the Greek debt crisis and an overnight market rout in China. The benchmark Standard & Poor’s index of 500 stocks ended the day down 1.7 percent.
Wednesday provided other reminders of the fragility of automated systems that are doing jobs people once handled. An apparently unrelated technical problem grounded United Airlines flights for nearly two hours on Wednesday morning. The homepage of The Wall Street Journal was also down for part of Wednesday.
“When we traded physically we didn’t have these problems, but this is the world that we live in,” said Ted Weisberg, a trader with Seaport Securities who has been on the floor of the New York Stock Exchange for nearly 50 years.
Computer technology has revolutionized the trading of stocks in recent decades, making it faster and more efficient. New powers have emerged, including the Intercontinental Exchange, or ICE, a commodities and derivatives trading platform based in Atlanta that acquired the New York Stock Exchange for $8.2 billion in 2013.
But there have been hiccups along the way. The Nasdaq stock market went down for three hours in 2013 because of a software bug. The year before, software at Knight Capital Group went awry, leading to errant trades that resulted in losses of $440 million.
The problem Wednesday at the New York Stock Exchange is likely to revive a debate about how regulators can make the markets more resistant to computer failings.