By Adam Samson and Andy Serwer
An internal technical hiccup halted trading on the New York Stock Exchange for more than three-and-a-half hours Wednesday, but in sign of resilience, other U.S. exchanges successfully picked up the slack.
The main NYSE platform re-opened at 3:10 p.m. ET, after shutting down at 11:32 a.m. as a result of the issue. The much smaller NYSE MKT re-opened at 3:05 p.m. ET.
NYSE spokesperson Marissa Arnold said in a statement the root of the problem was a "configuration issue." NYSE's all-electronic ARCA equities market was unaffected and continued normal operations. NYSE's AMEX and ARCA options markets were also operating normally.
On Twitter the Big Board headed off any concerns that the trading halt was caused by a malicious cyberattack: "The issue we are experiencing is an internal technical issue and is not the result of a cyber breach. We chose to suspend trading on NYSE to avoid problems arising from our technical issue."
Meanwhile, other major exchanges including Nasdaq (NDAQ), and BATS, declared so-called self-helps against NYSE, indicating they were routing trades away from the exchange. However, both exchanges revoked the self-helps in the 3:00-hour as NYSE resolved its issues.
The main NYSE platform handled 6.2% of U.S. volume on Wednesday, according to data from BATS. That compares to about 13.4% in June on average. Nasdaq handled 17.4% of trading on the day, while NYSE ARCA covered 12.6%.
A spokesperson for the Securities and Exchange Commission, Wall Street's top cop, didn't immediately respond to a Yahoo Finance request for comment on the matter. The White House said it was monitoring the situation, but noted the issue was not sparked by a malicious player.
Shares of the IntercontinentalExchange (ICE), NYSE's parent, were down 2.4%, compared to a 1.7% drop for the broad S&P 500.
Nasdaq suffered from the so-called Flash Freeze just about two years ago in which a "combined series of technology events" halted trading on the electronic exchange for about three hours. Initially, it was thought that high-frequency trading could have played a role in the freeze, but Nasdaq eventually said that was not part of the cause.
Ralph Schlosstein, CEO of Evercore, called the suspension "a yawn,” saying that trading volume was easily diverted and absorbed by other trading platforms.
Schlosstein equated the unprecedented closure — which lasted three hours and 38 minutes — to trying to drive downtown in New York City on Park Avenue and that road being closed and then simply picking another avenue.
Schlosstein, who’s been CEO of Evercore—an investment banking advisory business—since 2009, cautioned against concluding that the shutdown was necessarily simply a computer failure and not a computer hack of some sort.
Despite the fact that the NYSE has said it was a system failure, Schlosstein says that in his experience, it sometimes takes a few days to come to a firm conclusion. Schlosstein, a Wall Street veteran, who co-founded BlackRock, now the world’s largest asset manager, said he contacted his head of equities once he heard about the shutdown at the NYSE to see if his business was OK, and was told the it was fully operational.
Markets tumble on China, Greece worries
Markets were down significantly on Wednesday, but they had been off at the same levels prior to the closure on Greece and China fears. Still, today’s closure didn’t put traders in any sort of buying mood after the reopen in the afternoon.
The S&P 500 was off 34.7 points, or 1.7%, the Dow Jones Industrial Average was down 261 points, or 1.5%, and the Nasdaq Composite shed 87.7 points, or 1.8%.
China's Shanghai Composite, which already fell into bear-market territory, plummeted 5.9% overnight in volatile action. The move came despite attempts by the country's government to shore up the equity market there.
"Let’s not call it a correction in China, let’s call it what it really is, a crash. Just because it didn’t happen in just one day like other so called crashes doesn’t make it any less so," Peter Boockvar, chief market analyst at The Lindsey Group, wrote in a note to clients.
"What is most significant though is that it came in the face of almost every attempt possible by Chinese authorities to prevent it from happening."