By Wallace Witkowski and Kate Gibson, MarketWatch
SAN FRANCISCO (MarketWatch) -- U.S. stocks closed higher
Thursday, getting a slight boost after Nasdaq-listed stocks resumed
trading from a more than three-hour halt due to technical
trouble.
Snapping a six-session bout of losses, its longest since July
2012, the Dow Jones Industrial Average (DJI) closed higher, rising
66.19 points, or 0.4%, to 14,963.74, a few points higher than it
had been before the Nasdaq resumed trading.
Energy and industrials paced sector gains on the S&P 500
index (SPX), which closed up 14.16 points, or 0.9%, at
1,656.96.
Just after midday, the Nasdaq OMX Group (NDAQ) said it had
halted trading in all Nasdaq-listed securities due to technical
issues. The New York Stock Exchange, BATS and DirectEdge exchanges
also said they were halting trading in Nasdaq-listed shares.
With trading re-opening at around 3:25 p.m. Eastern, the Nasdaq
Composite (RIXF) closed up 38.92 points, or 1.1%, at 3,638.71.
Before grinding to a halt, the index had been up 31.38 points.
As the Nasdaq started trading again, NYSE Euronext said it was
having "sporadic difficulties" processing outbound quotes to
Nasdaq's data feed, and would cancel trades made during the
halt.
In a statement following the close, Nasdaq said the problem was
that "price quotes were not being disseminated by the Securities
Industry Processor (SIP), which consolidates and disseminates all
prices for the industry."
It said the actual technical issues were resolved within 30
minutes, with the remaining time needed "to ensure an orderly
re-opening of trading."
An investigation is planned, along with "any necessary steps to
enhance the platform," Nasdaq said.
For every share declining, roughly five gained on the New York
Stock Exchange, where 573 million shares traded by the close.
Composite volume was around 2.5 billion, hampered by low volume on
all exchanges due to the Nasdaq-listed-stock halt. For total
composite volume, it was the lowest full-day volume of the
year.
The shutdown was very risky for market makers as they were
"literally trading in the dark," said Benedict Willis, a floor
trader for Albert Fried & Co, in emailed comments.
"The small investor should be using limits on their orders,"
Willis said.
Securities and Exchange Commission Chair Mary Jo White said in a
statement late Thursday that the shutdown "while resolved before
the end of the day, was nonetheless serious and should reinforce
our collective commitment to addressing technological
vulnerabilities."
She said the SEC would convene a meeting to discuss such efforts
and that the agency would advance previously proposed rules
"regarding new standards for the trading and other systems that are
central to the integrity of our markets."
The Nasdaq glitch was reminiscent of the 2010 Flash Crash and
also two incidents -- one in 1987 and 1994 -- when squirrels on
power lines shut down the power grid the Nasdaq was using. The 2010
event and the problems surrounding the Facebook IPO debut have
illustrated the pitfalls of investing in a complex,
technology-dominated environment-- and one reason retail investors
stayed on the sidelines for much of the past bull market.
Stocks got off to a good start earlier in the day as economic
data cast a favorable light on growth in the U.S. and overseas.
"The economy is not at this point looking like it's going into a
recession. It is certainly not booming, and that is the quandary
the Fed has and why the taper is such a big deal," said Paul Nolte,
managing director at Dearborn Partners in Chicago, referring to
signals from the Federal Reserve that it would curb its $85 billion
in monthly bond purchases before the end of the year.
"The question now being asked is how much and when, and the Fed
has left that very open," he added.
The dollar (DXY) gained against the currencies of major U.S.
trading partners, including the yen (USDJPY). The yield on the
10-year Treasury note (10_YEAR) used in determining mortgage rates
and other consumer loans rose less than 1 basis point to
2.904%.
On the New York Mercantile Exchange, gold futures (GCZ3) rose 70
cents, or less than 0.1%, to settle at $1,370.80 an ounce, while
crude-oil futures(CLV3) settled up $1.18, or 1.1%, at $105.03 a
barrel.
Hewlett-Packard Co. (HPQ) closed down 12% after the Dow
component and personal-computer maker's quarterly profit outlook
disappointed.
GameStop Corp. (GME) finished up 9% after the videogame retailer
raised its 2013 profit outlook. The stock was the biggest S&P
500 gainer.
Abercrombie & Fitch Co. (ANF) sank nearly 18%, making it the
worst S&P 500 performer, after the retailer reported
second-quarter earnings beneath market expectations.
Data dependent
Applications for jobless benefits fell to a more-than five-year
low during the past month, illustrating continuing improvement in
the U.S. labor market, the government reported.
Separate data had U.S. house prices climbing 7.7% year-over-year
in June, and up 0.7% from May, the Federal Housing Finance Agency
said.
"The housing data was good; weekly jobless claims continue to be
good, so I would continue to expect that we'll see payroll growth,
the monthly numbers in the range we've been seeing -- it's not
fabulous but it's growth," said Nolte of the nonfarm payrolls
report due on Sept. 6, the final such report before the Federal
Open Market Committee starts a two-day session Sept. 17.
The Conference Board's index of economic indicators rose 0.6% in
July to 96.0, slightly above estimates.
Economic reports from overseas had Germany pacing gains in
manufacturing and services in the euro zone, and a measure of
factory productivity expanded in China.
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