Nasdaq's System Outage This Week Highlights Limitations of Technology Amid Heavy Volume
NEW YORK -- The Nasdaq Stock Market, by some measures, is having a great year. Day after day, trading volume and indexes tracking the market's technology stocks have hit records.</br></br>But for Nasdaq itself, which likes to bill itself as the tech market for tech companies, all that volume and the technology needed to keep up with it have been double-edged swords.</br></br>The 17-minute outage of key Nasdaq trade-reporting and order-routing systems Tuesday not only crippled the market in the half-hour leading up to the 4 p.m. EST close -- it also resulted in incorrect day-end values for the Nasdaq Composite Index and for certain individual stocks, including six of the vigorously traded Nasdaq 100-index tech stocks.</br></br>The Nasdaq Composite's actual finish Tuesday was 3295.52, not 3293.05 as reported in many news outlets, including The Wall Street Journal. The index ended yesterday at 3269.39, down 26.13, on record volume of 1.65 billion shares. There were delays in morning trading, but they were less severe than Tuesday's problems.</br></br>While Wall Street traders said Tuesday's shutdown was the worst of the recent problems, they also said it wasn't the first problem they'd experienced with Nasdaq's technology and in particular with SelectNet, the heavily trafficked e-mail system used to send orders and report trades. SelectNet problems, they say, have gone on for months and are particularly pronounced on days like Tuesday when volumes surge.