U of L Engineering professor calls NYSE computer glitch 'show stopper'
LOUISVILLE, Ky. (WDRB) -- For three and a half hours today, people around the nation and the world held their breath while the New York Stock Exchange was shut down.
It happened late morning. Trading on the New York Stock Exchange was halted, after what was called a technical glitch. Three and a half hours later, trading resumed. But the incident left investors unsettled.
George Moorin, with Louisville-based investment brokerage Hilliard Lyons, says he thinks the shutdown lasted much longer than it needed to.
"Some executive made the decision at the NYSE not to switch over to Chicago's disaster recovery site," he said. "And, so, if that had switched over and it worked, then they would've been up and going a lot sooner than 3:10."
But Moorin also says the situation didn't shut down trading, in fact, far from it. While the New York Stock Exchange pretty much ran the show years ago, these days, it's just one of many in the game.
"Now, we have five or six exchanges and 50-some-odd broker dealers who route to those exchanges," Moorin said. "So, now the NYSE garners about 15 percent market share."
But the question remains, what exactly caused the glitch? The FBI says there's no evidence of a cyber attack. The Wall Street Journal is quoting a source as saying that the Stock Exchange told floor traders the problem originated in a software update it installed Tuesday night.
U of L computer engineering assistant professor Adrian Lauf explains what led up to the shutdown.
"What we saw today with the New York Stock Exchange is something that is a bit of a show stopper," he said. "We can no longer say for sure beyond a certain point that the transactions that are occurring are likely to be accurate, and that's why they had to come to a stop."
Trading exchanges have struggled with technical troubles recently. In May of 2010, the Dow plunged hundreds of points in mere minutes because of mass selling triggered by computerized trading programs. In 2012, a highly anticipated arrival of Facebook on the NASDAQ was marred by a series of technical problems. Lauf says one positive side of today's incident, it's a chance to pinpoint and learn from a potential problem.
"Network security analysts and just system administrators will start poring over log files, they'll start pouring over access records, they look at the whole timeline of events that led up to the problem as it happened," he said.
Lauf says the fact that this happened on the same day as computer problems with United Airlines and the Wall Street Journal's website is likely just a coincidence.
He says in fact failures like this happen every day, but typically there are backup systems that prevent them from becoming a problem.
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