Major Disruption at Nasdaq Reuters

8:00 a.m. 10.Mar.2000 PST NEW YORK -- The widely watched Nasdaq composite index froze for roughly half an hour Friday morning, which Wall Street brokerage firms said significantly disrupted trading.

http://www.wired.com/news/business/0,1367,34892,00.html

The snafu came less than 24 hours after the red-hot technology-heavy index grabbed worldwide headlines by surpassing the psychologically important 5,000 milestone at its close Thursday.

It marked the second time in less than a month that the composite index failed to update. On 18 February, the symbol of the roaring "new economy" stocks froze for about two-and-a-half hours because of a technical glitch, leaving investors clueless about the direction and movement of the technology-saturated market.

Officials at the electronic stock market Friday morning described the problem as a "hiccup in the system," saying the actual computer glitch occurred for less than two minutes.

"Unfortunately, the glitch at the opening was disastrous," said Len Hefter, executive vice president of Nasdaq trading at Jefferies & Co. in Dallas. "You couldn't execute trades. You couldn't get prices. It caused havoc, most importantly for the customer base of the Street."

The problem caused the index to jam from 9:45:10 to 9:46:34, but the temporary breakdown caused a back-up in the processing of stock prices that make up the index, Nasdaq spokesman Scott Peterson said. "I can best describe it as a hiccup in the system," Peteron said. "... information wasn't being processed to our market makers properly."

The problem was traced to a computer cable connected to a mainframe computer at Nasdaq's technical center in Trumbull, Connecticut, a Nasdaq spokesman said.

-- A. Gilliland (AGILLILAND@kscable.com), March 10, 2000

Answers

(Update: Major disruption at Nasdaq was caused by a new software upgrade. What a coincidence that both the Toronto Stock Exchange and Nasdaq are experiencing serious problems)

Online News, 10/06/99 05:57 PM

Nasdaq temporarily disconnects trading networks

By Thomas Hoffman

Three alternative trading networks had to be temporarily removed from the Nasdaq Stock Market Inc.'s trade reporting and quotation system this morning when a software upgrade led to a slowdown of the stock market's SelectNet system.

The three electronic communications networks that were affected -- Island ECN Inc., Instinet Inc. and BRUT -- were temporarily prevented from receiving Nasdaq stock quotes.

Two of the ECNs requested to be removed from the market because of the slowness of the existing SelectNet system, which was being updated starting Tuesday night to accommodate Nasdaq's plans to begin offering after-hours trading support (see story) beginning next week.

ECNs are alternative trading networks that allow buyers and sellers of stocks to conduct transactions without Nasdaq market makers such as Goldman, Sachs & Co. Island was reconnected at 12:37 p.m. EDT; Instinet at 1 p.m. and BRUT at 1:04 p.m.

Nasdaq temporarily removed the high-traffic ECNs from the system to reduce the volume of activity and help the system run faster, according to a press release issued by Nasdaq.

Source: Excite News

http ://search.excite.com/relocate/sr=webresult|ss=Nasdaq+index+temporarily |id=10212543;http://dvd.idg.net/crd_trading_87333.html

-- Lee Maloney (leemaloney@hotmail.com), March 10, 2000.

Aha! Take a look at Carl's article on this board: "Fear of Potential Technical Problems Prompts Nasdaq Group to Ask SEC to Delay Decimal Trading Until Next Year"

Did the Nasdaq freeze occur because they tried to rush a software upgrade converting to the new decimal system? I would bet 1-point- zero-zero dollars they did.

-- Lee Maloney (leemaloney@hotmail.com), March 10, 2000.