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Tech glitch halts Nasdaq trade

A technology glitch shut down trade on the Nasdaq for more than three hours, an unprecedented halt on the second-largest US stock exchange.


Full trading resumed around 3.25pm (5.25am AEST on Friday).

The tech-rich exchange halted trade at about 12.15pm in all “Tape C” securities, which includes options and securities due to a problem with its SIP, or securities information processing, system, which interfaces with other exchanges on stock quotes.

The suspension froze values on big technology stocks like Apple, Google and Facebook as well as the value of the Nasdaq Composite index.

The Nasdaq index was up 31.38 (0.87 per cent) at 3,631.17 when trading was halted.

Shortly after it resumed, the index was up 34.13 (0.95 per cent) at 3,633.92.

The glitch promises to increase scrutiny on Nasdaq, which came under fire following technical difficulties with Facebook’s initial public offering in May 2012.

After that debacle, Nasdaq paid the Securities and Exchange Commission a $US10 million ($A11 million) penalty, following a series of missteps that included a design glitch in Nasdaq’s system to match IPO buy and sell orders.

An SEC spokesman said the US securities regulator was monitoring the situation and was “in close contact with the exchanges.” Treasury Secretary Jacob Lew was briefed on the issue, officials said.

The shutdown came on a quiet day for Nasdaq, with no major economic news events or earnings from major Nasdaq companies. But analysts said such a stoppage could cause significant problems on a busier news day.

“We’re still investigating this. It’s a technical problem on the UTP SIP system, halting all the Nasdaq options” said Nasdaq spokesman Ryan Wells.

Because other exchanges could not see price quotes from Nasdaq, that meant other exchanges that trade Nasdaq-listed stocks, such as the New York Stock Exchange, could not continue to trade Nasdaq stocks.

Art Hogan, head of product strategy at Lazard Capital Markets, said the halt was “frustrating, but you don’t lose any money. You just lose time.”

He said the stoppage was unprecedented.

“I’ve never seen an entire exchange shut down for 1 1/2 hours for technical issues during the middle of the day,” Hogan said earlier in the afternoon.

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