A technical issue on the floor of the New York Stock Exchange caused sizable losses for U.S. stocks on July 8. The issue forced NYSE and all others on the floor to stop trading for half of the day.
Investors were still able to buy and sell stocks, as the issue in New York didn’t affect the dozens of other exchanges where U.S. stocks such as NASDAQ are traded. The Dow Jones however, lost 261 points, which is about 1.5%. The Standard and Poor’s 500 lost 37 points (1.7%), and NASDAQ fell 87 points (1.8%).
The floor trading volume of the NYSE was around 444 million for the day, about half of the usual 861 million. However it is important to note that trading on the NYSE floor only accounts for a quarter of trading on all NYSE securities on all platforms.
The NYSE never announced what the issue was, but stressed that the issue was internal and not their systems being hacked.
“I can’t say with precision exactly what drove it,” NYSE President Thomas Farley told CNBC. “We found what was wrong and we fixed what was wrong and we have no evidence whatsoever to suspect that it was external.”
Trading was halted around mid-morning and picked back up around 3:10 in the afternoon. It did not affect the electronic NYSE Arca or Amex/Arca Options. NASDAQ said it had no technical issues and continued to trade NYSE-listed stocks through their outage.
All open orders, including market on close, were canceled, if the outage happened while they were in progress.
“Do we need to change our protocols? Absolutely. This can’t happen again. We can’t put ourselves in this position again. Exactly what those changes are, I’m not yet prepared to say,” Farley said.
This outage has set people on edge about the market’s strength once again. The median return–over many 25 year periods– was 11.4%, and the return from was around 4.3%. However, with markets around the world becoming increasingly unpredictable, many are on the fence about trusting the stock market. Only time will tell which side the chips will fall on.