NEW YORK – The New York Stock Exchange was forced to suspend trading for several hours on Wednesday in the biggest outage to hit a U.S. financial market in nearly two years, unnerving investors already rattled by the meltdown in Chinese stocks and the Greek debt crisis.
The exchange, a unit of Intercontinental Exchange Inc., reopened at 2:10 p.m. Central time after being halted shortly after 10:30 a.m. The NYSE said the failure was caused by an internal technical problem and not a cyberattack. Other exchanges were trading normally.
"It's not a good day, and I don't feel good for our customers who are having to deal with the fallout," NYSE President Thomas Farley told CNBC during the halt.
The NYSE, which traces its roots back to an agreement under a buttonwood tree on Wall Street in 1792, handled 6.12 percent of U.S. stock volume for the day, with much of that coming after the exchange reopened, according to statistics from BATS Global Markets. That compares with an average of about 13.4 percent last month.
Traders had awaited the reopening anxiously because much of the NYSE's business happens when portfolio managers put in orders designed to occur at the exact market close to ensure end-of-day pricing.
However, many traders said that it did not matter that the NYSE was down. That's because there are 11 U.S. stock exchanges, including those run by Nasdaq OMX Group and BATS, along with more than 40 private stock-trading venues, so the trading of NYSE-listed stocks was uninterrupted.
"This is one of the rare cases where the fragmented markets we live in actually serve a purpose," said Dave Nadig, director of exchange-traded funds at FactSet Research Systems. "If this happened at [the London Stock Exchange], you would just be sitting staring at a blank screen."
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.
The NYSE had been experiencing technical issues even before the market opened. The exchange had said it was experiencing connectivity problems that may have prevented some of its customers from getting acknowledgments on orders submitted in some 220 stocks.
The NYSE's glitch came on the same day that computer problems led United Airlines to ground all its flights for about two hours and the home page of the Wall Street Journal's website temporarily went down.
The U.S. Department of Homeland Security said there were no signs that the problems at the NYSE and United Airlines stemmed from "malicious activity." The SEC said on Wednesday that it was closely monitoring the situation at the NYSE. The White House said President Obama had been briefed on the matter.
Nearly all U.S. trading is done electronically, and the NYSE outage again raised questions about the robustness of the technology at exchanges after a raft of major glitches in recent years.
A technical problem at the NYSE's Arca exchange in March caused some of the most popular exchange-traded funds to be temporarily unavailable for trading. And in August 2013, trading of all Nasdaq-listed stocks was frozen for three hours, leading U.S. Securities and Exchange Commission Chairwoman Mary Jo White to call for a meeting of Wall Street executives to insure "continuous and orderly" functioning of the markets.