NYSE shutdown upends an already tough day for markets
NEW YORK (AP) -- It was already a tough day in the market when the unexpected hit.
The New York Stock Exchange halted trading late Wednesday morning because of technical trouble.
The outage came as traders had plenty of other things to worry about. Concerns about China's plunging stock market and a logjam in talks between Greece and its creditors weighed on the mood. Major indexes were already falling before the shutdown, which occurred shortly after 11:30 a.m. Eastern time. NYSE resumed trading at 3:10 p.m.
The exchange, in a statement late Wednesday, attributed the malfunction to a "configuration issue" and not as the result of hackers. A NYSE spokeswoman would not provide further details.
The broader stock market stayed open as orders to buy and sell kept flowing to the Nasdaq and other exchanges around the country.
Tom Caldwell, who runs an investment firm with stakes in several exchanges, said there are some 60 exchanges and trading venues that can take orders when one goes down, so investors shouldn't get rattled.
"It's disruptive, but not wildly disruptive," said Caldwell, chairman of Caldwell Securities.
President Obama was briefed on the NYSE situation, according to Josh Earnest, the White House spokesman. Officials told the president there were no malicious actors involved.
By the end of the day, the Standard & Poor's 500 index fell 34.66 points, or 1.7 percent, to close at 2,046.68.
The Dow Jones industrial average dipped 261.49 points, or 1.5 percent, to 17,515.42 and the Nasdaq slid 87.70 points, or 1.8 percent, to 4,909.76.
U.S. markets have been dogged by technical problems over recent years as more trading is handled by computers. In May 2010, the Dow plunged hundreds of points in minutes in an incident that later became known as the "flash crash." In March 2012, BATS Global Markets, a Kansas company that offers stock trading services, canceled its own IPO after several snafus.
Two months later, a highly anticipated IPO of Facebook on the Nasdaq exchange was marred by a series of technical problems, rattling investors unsure if their orders went through.
James Angel, an associate professor of finance at Georgetown University's McDonough School of Business, said NYSE's shutdown highlighted both the fragility and the resilience of modern technology. Angel sat on the board of exchange company Direct Edge before it was acquired by a larger rival last year.
"From an investors' perspective, if you hadn't heard about the outage, you probably wouldn't have noticed," Angel said.
Portfolio manager Mark Spellman of Alpine Funds said an outage similar to Wednesday's would have caused panic a few decades ago, when the NYSE dominated the market. But firms making trades were able to use a variety of other exchanges while the NYSE was out of commission. He says the disruption didn't cause any problems for the global markets.
"Only 15 to 20 percent of global stock exchange trading happens on the NYSE these days," he said. "Things are so spread out."
Still, others on Wall Street found the long outage unsettling.
Phil Orlando, chief equity strategist at Federated Investors, said it was unsettling that computer problems also forced United Airlines to temporarily ground its flights across the country and the Wall Street Journal's website went down, all on the same day.
"These are visible icons of American industry," he said. "It's just unnerving."
Todd Leone, a trader with Meridian Equity Partners, said in an interview outside the New York Stock Exchange that occasional technical glitches are a "fact of life" today.
"It's a little bit scary," Leone said, speaking during the NYSE outage. "Computers dominate our lives."
In China, the Shanghai Composite sank 6 percent despite new attempts by China's government to stop the selling. Hong Kong's Hang Seng, a victim of the turmoil in mainland Chinese markets, also lost 6 percent. Beijing ordered state-owned companies to buy shares and promised more credit to finance trading. The Shanghai index has lost almost a third of its value in the last month. It is still up 70 percent over the past year.
In Europe, Greece applied for a new three-year loan and said it would have a new proposal for creditors in coming days. The deeply indebted country needs a financial lifeline from its European lenders before its banks collapse, an event that could push Greece out of the currency union.
EUROPEAN STOCKS: The region's major markets finished with gains. Germany's DAX gained 0.7 percent and France's CAC 40 rose 0.8 percent. Britain's FTSE 100 added 0.9 percent.
METALS: Gold rose $10.90 to $1,163.50 an ounce, and silver added 20 cents to $15.15 an ounce. Copper gained 5 cents to $2.50.
BONDS AND CURRENCIES: U.S. government bond prices edged up, nudging the yield on the 10-year Treasury down to 2.20 percent from 2.26 late Tuesday. The euro rose to $1.1083, while the dollar fell to 120.78 yen.
CRUDE: The price of oil fell after the Energy Department reported a surprise increase in crude oil supplies for the second straight week. Benchmark U.S. crude fell 68 cents to close at $51.65 a barrel in New York. Brent crude, an international benchmark, rose 20 cents to close at $57.05 in London.
OTHER ENERGY MARKETS: Wholesale gasoline rose 5 cents to close at $1.999 a gallon. Heating oil rose 0.4 cent to close at $1.715 a gallon. Natural gas fell 3.1 cents to close at $2.685 per 1,000 cubic feet.
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