New York Stock Exchange blames ‘manual error’ for trading glitch
By Nicole Goodkind, CNN
New York Stock Exchange officials said Wednesday that a “manual error” was responsible for the massive price swings and trading halt of hundreds of company stocks that punctuated Tuesday’s market open.
The root cause of the error, which the exchange said has been resolved, was an error tied to the company’s “disaster recovery” configuration, they said. It appears that a manual test of their emergency system went awry.
In total, more than 1,300 trades and 84 stocks were impacted by the error and marked as abnormal, according to NYSE. The exchange also said that 4,341 trades in 251 ticker symbols “should be busted,” or canceled.
Some of the largest financial institutions, retailers, communications and industrial companies were affected by the glitch on Tuesday, including McDonald’s, Walmart and Exxon Mobil, according to NYSE.
Many of those stocks made large moves on Tuesday just minutes into the morning trading session, sending some shares into a nosedive.
What happened?
Stocks typically open for trading on the NYSE at 9:30 a.m. ET, and each stock is given an “opening price” that is determined through a complicated system that uses the thousands of orders that accumulated overnight and early in the morning ahead of the opening bell.
The exchange compiles these buy and sell orders and formats a single price that is then quoted at market open. The price is meant to balance out supply and demand for the stock and limit volatility in early trading.
Exchange officials said this pricing process “did not occur” on Tuesday for a number of these stocks. That meant those shares opened with supply-demand imbalances at prices very far from where they closed on Monday.
What’s next?
“All exchange systems are operational, and a normal opening for Jan. 25, 2023, is expected,” NYSE said in a statement early Wednesday.
The Securities and Exchange Commission, meanwhile, has said it is looking into the issue. A spokesperson told CNN on Wednesday that “staff are reviewing the activity and have been in touch with the relevant exchanges.”
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