The glitch that halted trading on the New York Stock Exchange is leaving investors of all ages scratching their heads.
NYSE suspended trading at 11:32am ET Wednesday due to what it called an internal technical problem, not a cyber attack.
Various law enforcement and government security agencies, including the FBI and Homeland Security Department, have said they see “no malicious activity” at this stage.
Many CNNMoney readers and investors have been tweeting and writing in with questions. Here are the answers to the most frequently asked questions.
1) Can I still buy and sell stocks? Yes. The United States has many stock exchanges where you (and other investors from around the world) can buy and sell stocks. Only the New York Stock Exchange stopped working on Wednesday.
“People can trade. If you’re a retail customer you won’t notice the difference in how the order is handled,” said James Angel, a finance professor at Georgetown University who has testified before Congress on market structure issues.
Investors placing trades are being routed to other exchanges, such as Nasdaq and BATS. Even stocks listed on the NYSE are still trading elsewhere.
2) Is this a cyber attack? Authorities don’t believe so. There is no evidence yet that this is a cyber attack. NYSE put out a statement saying that it halted trading because of a technical problem and that it was “not the result of a cyber breach.” Government agencies have said the same thing. As a Homeland Security spokesman told CNN, there “are no signs of malicious activity at this time.”
3) Has this ever happened before? Yes. There was a “Flash Freeze” on the Nasdaq in 2013 that lasted three hours. That more serious incident caused all Nasdaq-listed stocks to stop trading altogether.
Still, it’s highly unusual to see a mass outage like this for several hours. Smaller outages have occurred in the past though.
4) Will this impact my 401k? Probably not. Stocks were already down Wednesday because of investor concerns about China’s plunging stock market and the ongoing Greece debt saga. While the market might slide further once the NYSE resumes trading, it should be a “once and done” situation.
The only way it has lasting impact is if we learn that this was a cyber attack. That would dent investor confidence by implying it could happen again.
5) Should I dump stocks simply because of this? No. There are lots of legitimate reasons to be worried about stocks like Greece, China and expensive stock prices that might not be justified. The NYSE halt is minor in comparison, at least at this stage.
“Heaven’s no,” Angel said in response to whether mom-and-pop investors should sell because of the NYSE incident.
“Today’s glitch is a reminder of the complex nature of our markets, but I find it quite reassuring of how resilient our market network really is,” he said.
6) Why is the Dow still moving? If you are looking at a trading screen, you still see popular indexes like the Dow, S&P 500 and Nasdaq moving up and down because stocks are still trading on all other stock exchanges except the NYSE. The Dow was down about 175 points when NYSE halted trading. It fell further than that before rebounding to about the same level.
7) How much money will potentially be lost? Likely not much. It’s possible the NYSE could be fined and that some trading firms won’t make as much money Wednesday because of lower trading volumes. But so far, the stock market sell-off isn’t that much worse than it would have been without the NYSE glitch.
8) How significant is this and what are the consequences? At this point, the impact is limited. The NYSE could lose some business if investors are concerned that a technical problem could happen again, especially since trading still continued on other exchanges.
“This is a minor technical issue. We’re going to see more of these in the future,” Angel said.
