Glitch at NYSE briefly halts trading in dozens of blue-chip stocks

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The New York Stock Exchange on Tuesday mentioned it might cancel trades in some stocks after issues with its opening public sale brought on sharp swings in blue-chip names similar to ExxonMobil and McDonald’s.

The US Securities and Exchange Commission mentioned it was reviewing the issue after NYSE mentioned a “system issue” affected the open of round 250 stocks.

The alternate mentioned it didn’t conduct opening auctions in the affected stocks, that means they started trading with out correct “Limit Up Limit Down” bands, that are designed to cease securities from trading at excessive costs.

The error led some stocks similar to Wells Fargo to plunge greater than 10 per cent at the market open, whereas others similar to AT&T briefly surged earlier than trading was halted. NYSE mentioned its programs have been working correctly about 20 minutes later, and mentioned trades that have been executed exterior the right limits will probably be declared null and void.

Shares in Intercontinental Exchange, which owns NYSE, fell 2.2 per cent on Tuesday, in contrast with a 0.1 per cent decline in the benchmark S&P 500 index.

NYSE’s opening auctions use a mixture of algorithmic quotes and a bodily public sale managed by human market makers at companies similar to Citadel Securities, Virtu and GTS.

The alternate advised the market makers that the issues have been brought on by an inner subject reasonably than something to do with the market makers, however didn’t present additional particulars, mentioned three folks briefed on the conversations.

One market maker estimated greater than $1bn value of orders have been affected, with the amount of shares traded at the open down virtually 90 per cent in comparison with latest averages.

The SEC mentioned “staff are reviewing the activity and have been in touch with the relevant exchanges”, whereas one worker at a market maker mentioned they’d additionally spoken with the regulator.

The drawback comes simply weeks after the SEC introduced plans to direct a better proportion of trades via public sale programs at exchanges, and have been instantly leapt on by opponents of the adjustments. “The SEC is pushing to have all retail order flow go to auctions on exchanges. This doesn’t bode well,” mentioned one individual concerned in the lobbying efforts.

Such a giant error is uncommon however not unheard of for big stock exchanges, which usually delight themselves on being resilient in the face of any sudden volatility or technical drawback.

The head of the Tokyo Stock Exchange resigned in 2020 after a {hardware} glitch halted equity trading on the world’s third-largest bourse for a full day, whereas the Toronto Stock Exchange suffered transient outages final November and in the early days of the coronavirus pandemic.

In 2018, NYSE was fined $14mn by the SEC over a sequence of issues, together with trading outages.



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