NASDAQ screens go blank - software upgrade glitch cited

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CNBC reported that NASDAQ screens went blank today toward the end of trading - as volume on tech stocks was heavy. The computers were restored before the end of the trading period. They were down 10 min. or so.

News anchors reported that "a software upgrade" was to blame, and that clients who wanted to buy were angry.

Anyone got more details or a link?

-- 5R2k (Fiver2000@yahoo.com), November 16, 1999

Answers

Nasdaq Systems Crash on Busiest Day Ever Tuesday November 16 7:25 PM ET

Nasdaq Systems Crash on Busiest Day Ever

By Elizabeth Smith

NEW YORK (Reuters) - The Nasdaq stock market said a software upgrade designed to ease the burden of surging volume caused its systems to crash Tuesday -- on its busiest day ever.

The system shut down at 3:40 p.m. just as the Nasdaq logged a record 1.48 billion stock trades in a wild rally driven by the U.S. Federal Reserve's decision to raise short-term interest rates, but put further hikes on hold.

The shutdown, which lasted for about 20 minutes, comes at a time when Nasdaq is building sister markets in Europe and Japan to create a 24-hour, global electronic stock market.

``The problem from what we can tell was due to an inter-day software upgrade,'' Nasdaq spokesman Wayne Lee said. ``It was being upgraded to help with heavy volume.''

The upgrade disrupted SelectNet, Nasdaq's main order-routing facility, and SOES, its small-order execution system.

Alternative trading systems, also known as electronic communications networks, or ECNs, profited from the shutdown as major brokerages funneled them orders from customers.

ECNs, sometimes nothing more than an office full of computers, can match stock trades independently of Nasdaq. As a result, large brokerage firms with heavy order flow from customers routed their business to ECNs.

``We have our own data feed, so we continue to trade as we would normally do,'' said Cameron Smith, general counsel for Island, the No. 2. U.S. ECN.

System glitches have dogged Nasdaq in the last year, as it watches the daily trading volume of its shares mushroom due to a seemingly unstoppable U.S. economy. In early October, three electronic trading systems closed down temporarily because Nasdaq's systems overloaded.

Built in 1971 by the National Organization of Securities Dealers or NASD, the Nasdaq is purely electronic and has no physical trading floor. Consequently, systems make up its lifeline to traders who deal in the 5,000 stocks listed on the market.

The world's highest-priced technology companies, such as Microsoft Corp (NasdaqNM:MSFT - news). and Cisco Systems Inc (NasdaqNM:CSCO - news)., trade on Nasdaq.

Nasdaq resurrected its systems in time to keep them open from 4 p.m. until 6:30 p.m. (2100 GMT until 2330 GMT). Recently, Nasdaq decided to keep its pricing systems open until 6:30 p.m., even though it still officially shut its own last trading session at 4 p.m.

``It was down for 20 minutes. It came up for a few seconds at the end, but then went back down,'' said James Volk, co-director of institutional trading at D.A. Davidson and Co., of Portland, Ore.

Some traders linked the breakdown to the record share volumes.

``Basically, around 3:35 (p.m.), the system just went down. Maybe it was overloaded,'' said a Nasdaq trader, who wanted to remain anonymous. ``I called Nasdaq and they said it was systemwide.''

Nelson Gold, a trader in Nasdaq-listed stocks at Wachovia Securities in Atlanta, took the system glitch in stride.

``It's a little traumatic when you're trying to do business,'' Gold said. ``But it's not the end of the world.''

-- Linda (lwmb@psln.com), November 16, 1999.


BOLD OFF!

-- Dennis (djolson@cherco.net), November 16, 1999.

The NASDAQ hit an all-time high on a day when its system went down and the Fed raised interest rates. The glib powers-that-be say we live in the best of all economic times. I live by the philosophy of the Grateful Dead in their song "Uncle John's Band."

"When life looks like easy street, danger's at the door."

-- Mr. Adequate (mr@adequate.com), November 16, 1999.


The NASDAQ hit a all-time high on a day when its trading system went down and the Fed raised interest rates. The glib powers-that-be say that we live in the best of all economic times. I follow the philosophy of the Grateful Dead in their song "Uncle John's Band."

"When life looks like easy street, danger's at the door."

-- Mr. Adequate (mr@adequate.com), November 16, 1999.


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