--Nasdaq-listed securities appeared frozen in time for several
minutes to many traders Thursday afternoon
--Not immediately clear whether issue stemmed from Nasdaq's own
systems or another exchange
--Trade data on Apple, Google stocks affected
By Matt Jarzemsky and Jacob Bunge
The Nasdaq Composite Index and all securities listed on the
exchange appeared to much of the investing world to be briefly
frozen in time Thursday afternoon, due to an interruption of a
widely used market-data system.
Nasdaq-listed securities continued trading throughout the
episode on some, though not all, U.S. exchanges, and many
professional traders were able to see the action using specialized
market-data services. But the issue caused moments of confusion on
Wall Street.
Nasdaq OMX Group Inc. (NDAQ), which owns the Nasdaq Stock
Market, notified traders at 1:42 p.m. EST that its staff were
looking into "an issue with stale data." A second notice, sent at
1:53 EST, said the issue had been resolved. A spokesman for Nasdaq
OMX confirmed the problem had been fixed but declined to comment
further. It wasn't immediately clear whether the issue stemmed from
problems with Nasdaq's own systems or another exchange.
Direct Edge Holdings LLC, which runs two electronic stock
exchanges, halted trading in all Nasdaq-listed stocks for about 10
minutes starting at 1:44 p.m. EST, according to a notice sent to
traders.
Meanwhile, services used by many individual investors left them
in the dark. The chart of the Nasdaq Composite Index on Nasdaq's
free website, for instance, showed a flat, parallel
line--reflecting no trading, or a level holding steady--during the
window in question rather than the jagged up-and-down ticks
investors are used to seeing. The index held at 3116.94 for more
than 15 minutes, according to data on Nasdaq's website.
"When an exchange goes down or goes static on a particular feed,
it can become a stressful situation on a desk, because you don't
always know where you stand," said Chris Hempstead, director of
exchange-traded-fund trading at WallachBeth Capital LLC, a New York
brokerage. Mr. Hempstead said his firm was able to continue
trading, using tools available to many professional traders.
The issue stemmed from a key feature of the U.S. stock market
that is unknown to most mom-and-pop investors. Nasdaq operates a
computer processor that disseminates information on offers to buy
and sell Nasdaq-listed securities among exchanges and other trading
venues.
The process is meant to ensure market participants are trading
on the venue that offers the best price. U.S. equity trading is
split among 13 stock exchanges and dozens of off-exchange
venues.
Separately, New York Stock Exchange parent NYSE Euronext (NYX)
operates similar systems sending information about securities
listed on its exchanges.
During the issue Thursday, data from FactSet, which distributes
information on stock pricing, showed no trades in Nasdaq-listed
stocks such as News Corp. (NWSA), Apple Inc. (AAPL) and Google Inc.
(GOOG) for about a 15-minute period ahead of 2 p.m. News Corp. owns
Dow Jones & Co., publisher of this newswire.
One hundred shares of Apple stock traded at 1:36:37 p.m. EST at
$547.64 a share, according to FactSet. The iPhone maker's stock
would normally see trades that can number in the dozens in just one
minute. But another Apple trade wasn't reflected in FactSet's data
for nearly 15 minutes, until 1:51:14, when 150 shares changed hands
at $547.70 a share.
Similar gaps were seen in the trading of other Nasdaq-listed
shares, including those of Cisco Systems Inc. (CSCO) and Amazon.com
Inc. (AMZN).
"I've heard of data issues, but this is the first time I've seen
anything like this," said Frank Ingarra, head trader at NorthCoast
Asset Management. "It's like a large hole in the middle of the
day."
-Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com
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