The New York Stock Exchange is back in business and stocks are bouncing.
NYSE enjoyed a smooth opening and stocks soared on Thursday morning following a major glitch that shut down trading for nearly four hours on Wednesday. The Dow opened more than 240 points higher before giving back a bunch of the gains. It’s now up just 90 points.
The return to normalcy at NYSE should allow investors and regulators to breathe a sigh of relief. The trading halt generated international headlines and briefly raised concerns about a cyber attack. However, NYSE and regulators say the outage was caused by an internal technical problem, not hackers.
“Business as usual. Whatever ghost was in the machine yesterday has obviously been extracted out,” Keith Bliss, director of sales and marketing at Cuttone & Company told CNN from the trading floor.
Stock pop: Investors have another reason to smile on Thursday: The bull market looks like it’s finding its legs again. Stocks surged right out of the gate, joining in a global rally that started in the rollercoaster Chinese stock market.
The S&P 500 is up 0.5%, and the Nasdaq advanced 0.6%. The gains bring the S&P 500 back to breakeven on the year, although the Dow remains a bit in the red.
While the NYSE outage Wednesday dented confidence, investors are a lot more focused on China. Wall Street cheered a huge rebound in China, which is scrambling to put a bottom under its crashing stock market. The Shanghai Composite declined another 3% at the opening bell and then did a 180 and ended the day up a whopping 5.8%
What caused the outage? NYSE believes the glitch was caused by a problem with a software update it rolled out on Tuesday evening, the exchange said in a new statement released on Thursday.
NYSE said the new software caused a communication problem on Wednesday morning between traders and the exchange. An initial fix allowed stocks to open as scheduled but additional communication issues arose by mid-morning. That’s when NYSE decided to pull the plug and suspend trading — a shutdown that lasted nearly four hours.
It’s important to note that investors were still able to buy and sell stocks despite the glitch. The outage only impacted NYSE, leaving other exchanges like Nasdaq and BATS to pick up the slack.
As a result of the trading halt, NYSE’s share of the trading action tumbled to a record low on Wednesday, according to Nanex, a firm that studies stock market data. Trading resumed shortly after 3 pm ET.
The problem highlights the complex nature of the trading systems and software at the heart of the stock market.
The NYSE outage was hardly the first glitch to impact the U.S. stock market. Previous problems include the 2013 incident at the Nasdaq that halted trading on all Nasdaq-listed stocks and the 2010 Flash Crash that mysteriously sent U.S. stocks plummeting before a rebound.