--NYSE stops trading in 216 issues
--Exchanges route orders away from NYSE
--NYSE market falls sharply
(Updates with context on volume in paragraph five, adds context
throughout)
By Chris Dieterich
NEW YORK--U.S. exchanges stopped sending orders to the Big Board
after operator NYSE Euronext (NYX) shortly after the opening bell
Monday following a technical glitch, severely crimping the number
of shares traded on the NYSE.
NYSE said in an alert to traders at 9:39 a.m. EST that its
equity market was experiencing an issue with one of its engines
that matches up buy and sell orders and that 216 issues were
affected, including CVS Caremark Corp. (CVS), Lazard Ltd. (LAZ) and
United States Steel Corp. (X).
Other exchange operators ceased sending orders to the NYSE in
the minutes after the opening bell. BATS Global Markets, Nasdaq OMX
Group Inc. (NDAQ) and Direct Edge Holdings LLC each declared
"self-help" against the NYSE shortly after 9:30 a.m., meaning each
stopped sending the NYSE orders. Even NYSE Euronext's own
all-electronic NYSE Arca platform stopped routing orders to the Big
Board in an alert at 11:29 a.m.
Exchanges can declare self-help when another market is slow to
respond to incoming orders or if the flow of information to and
from the exchange is disrupted.
The shortfall of incoming orders meant NYSE saw its market share
drop to than less than half of a normal day. A total of 127 million
shares traded on NYSE as of 1:45 p.m., or 4.9% of total market
share, according to data from BATS. On an average day, NYSE
represents more than 10% of total market volume.
The technical difficulties put the NYSE's trading volume well
behind electronic rivals Nasdaq, BATS and Direct Edge on Monday,
and each exchange saw more traffic that average.
As of 1:42 p.m., only Arca had revoked the self-help
declaration, meaning other exchanges still weren't routing orders
to the NYSE.
The problem arose as the exchange operator transferred a raft of
issues to its new "matching engine," a move designed to standardize
the way NYSE processes orders across its different venues,
according to an NYSE spokeswoman. Since September, some 800 stocks
have made the switch to NYSE's new matching engine, which is known
as the "universal trading platform."
NYSE halted its trading in those 216 issues shortly before noon,
according to a trader alert. The affected stocks represent just a
faction of the 3,825 total listings that trade on NYSE's floor,
according to an exchange spokeswoman, and other exchanges continued
to process orders in the affected stocks. The exchange operator
said it will update customers on the status of the affected stocks
and offered no estimate on when its trading would resume in those
216 issues.
It added that all its other trading systems were "functioning
normally."
Shares of the exchange operator rose 41 cents, or 1.9%, to
$23.36 in afternoon trading.
Write to Chris Dieterich at
christopher.dieterich@dowjones.com
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