A glitch at the New York Stock Exchange (NYSE) triggered massive swings in the shares of Berkshire Hathaway (BRK.A) and Barrick Gold (GOLD), causing trading halts in dozens of other companies on Monday before the bourse resolved the problem. The NYSE, owned by Intercontinental Exchange (ICE), announced by late morning that the technical issue had been fixed and the impacted stocks had resumed trading.
This incident marked the second stock market hiccup in less than a week, following a glitch last Thursday that affected the dissemination of real-time data for the S&P 500 and Dow Jones indexes for over an hour. The Consolidated Tape Association (CTA), responsible for disseminating real-time trade data on stock exchanges, attributed Monday's problem to a new software release at one of its data centers. The issue was resolved by switching to a secondary data center running the previous software version.
Market Overview:- NYSE glitch caused significant volatility in shares of Berkshire Hathaway and Barrick Gold.
- Trading halts occurred in dozens of companies before the problem was fixed.
- The issue was related to a new software release at a CTA data center.
- Berkshire Hathaway's class A shares and Barrick Gold showed massive drops due to the technical issue.
- The NYSE and CTA resolved the problem by switching to a secondary data center.
- Limit up-limit down bands, designed to prevent extreme price movements, were involved in the glitch.
- Investors are watching for potential reimbursements for losses caused by the glitch.
- The incident underscores the vulnerability of electronic trading systems to technical issues.
- Regulators and exchanges may review procedures to prevent similar occurrences in the future.
Some of the stocks halted on the NYSE exhibited unusual, outsized movements, with Berkshire Hathaway's class A shares and Barrick Gold shown to be down 99.97% and 98.54%, respectively, due to the technical issue before those trades were corrected. After trading resumed, Berkshire Hathaway was down about 0.3% and Barrick Gold was up 0.6%, with investors noting that overall sentiment remained unaffected.
The NYSE and the CTA indicated that the problem was related to limit up-limit down bands meant to prevent extraordinary market volatility and extreme price movements in individual stocks by preventing trades outside of specific price ranges updated throughout the trading day. The incident highlighted the ongoing challenges and potential risks associated with modern electronic trading systems, emphasizing the need for robust safeguards and contingency plans.
