WRAPUP-First Y2K hurdles cleared, market test nears

By Stella Dawson

NEW YORK, Jan 2 (Reuters) - The world's computer systems have safely cleared Y2K hurdles for the second day in a row, reporting only minor bumps and bruises, but officials say the real test comes Monday as trading begins in major financial markets.

Huge global testing of stock, bond and currency market systems in Tokyo, London and New York turned up only a few glitches, such as zeros entered in the wrong place.

But analysts are so confident the Y2K bug has been squelched for now that they predict a surge in global asset markets on relief buying.

``We start a whole new year; people are flush with cash. That money is going to seek a home in the markets,'' said Peter Cardillo, director of research at Westfalia Investments.

The Federal Reserve said it was cutting back staff at its 24-hour command centre after no problems turned up processing checks and electronic payments with several hundred customers. The U.S. Treasury even held a successful mock bond auction.

Still, officials caution against letting down the guard.

``Obviously we are confident, but there is still a question mark,'' said Doug Tillet, spokesman for the New York Federal Reserve.

Even so, top Wall Street officials are optimistic.

``The evidence suggests there probably will be very little disruption,'' former U.S. Treasury Secretary Robert Rubin, now chairman of Citigroup's executive committee, told CNN.

Chicago opens the first major markets, when electronic trading begins in currency, eurodollars and stock index futures contracts at 2330 GMT on Sunday. Shortly after the popular Treasury bond futures dealings begin.

Bug-free trading proceeded in the handful of stock exchanges that were open over the weekend -- Bangladesh, Oman, Kuwait, Egypt and Bahrain -- and many reported modest gains as Y2K jitters eased.

MINOR GLITCHES, NO DISASTERS

In Israel, which returned to work on Sunday, software companies were busy fixing numerous Y2K-related glitches in data-processing services caused by the shutdown of computer systems over the weekend.

Baruch Gindin, managing director of the Gartner Group Middle East, said these were little more than irritants -- and a preview of what may happen all over the world as billions of people return to work.

Minor glitches at hospitals and nuclear power stations were the only signs on Sunday of the millennium bug biting.

An X-ray machine stopped working in Norway. Heart-monitoring machines failed in three Swedish hospitals. But no patients were endangered and the problems were quickly fixed.

In Japan, a problem with a radiation monitoring system at a nuclear power plant on Saturday was confirmed as a millennium bug.

Four other computer malfunctions at nuclear plants in Japan, which suffered its worst nuclear accident in September, may also have been caused by the bug. All had been cleared up by Sunday.

In Germany, a salesman who logged into his home banking computer account found a malfunction had inflated his wealth to more than 12 million marks ($6.2 million) -- as of Dec. 30, 1899. But it was unclear this was due to the millennium bug.

And in Italy, a computer-regulated clock on a church campanile in a small northern town chimed earlier than usual on New Year's Day, a local news agency reported. Checks revealed the computer thought it was 1980 instead of 2000.

Officials said tests on trading floors on Saturday went without a hitch, as did checks on exchanges in Asia and Europe on Sunday.

Japan's financial watchdog, the Financial Supervisory Agency, reported minor glitches at one foreign bank and 15 domestic brokerages. But it said 14 of the 15 brokerages had already fixed the problems while those remaining were unlikely to develop into major headaches even if they were not solved by Tuesday.

The few stock exchanges open on Sunday, in Egypt and some other Moslem nations, reported no problems, although foreign exchange trading in Bangladesh was suspended until Monday as a precaution.

Such problems were few and far between. Across the world, markets, telecommunications and other infrastructure officials reported all systems were go.

The West African country of Gambia, singled out by a Y2K monitoring Web site as have problems especially with government computers, said all systems were go.

``We are getting normal electricity, the telecoms are fine, as you can see the e-mail is functioning, the banks are OK,'' said Paoa N'jie, a Gambian Y2K task-force official.

The Y2K bug stems from mainly older computer systems which programmed to read only the last two digits of a year. If the glitch is left uncorrected, systems could misread 2000 as 1900, causing systems to malfunction or even crash.

14:48 01-02-00

-- streamer (streamer@aol.com), January 02, 2000

Answers

Heh, zeros in wrong place can change $1 into $1 trill.

-- Hokie (Hokie_@hotmail.com), January 02, 2000.