The NYSE failure affected more than 250 stocks and caused big price swings

The NYSE failure affected more than 250 stocks and caused big price swings

  • A glitch in the New York Stock Exchange system caused some stocks to see big price swings at their open on Tuesday.
  • The exchange attributed the price swings to a “system issue” that prevented it from holding “opening auctions.”
  • A NYSE listing showed that more than 250 stocks were affected by the system failure.

A failure on the New York Stock Exchange caused the prices of some blue chip stocks including Morgan Stanley and Wells Fargo to swing wildly on Tuesday, causing chaos in the markets.

A NYSE listing showed that more than 250 stocks were affected by the system glitch, triggering huge price swings just after it opened at 9:30 a.m. in New York.

Shares of Morgan Stanley, for example, closed at $97.13 on Monday, but fell nearly 13% to $84.93 at its open on Tuesday. Wells Fargo shares also fell 15% to $38.10 on Tuesday, shortly after the open. They had closed at $45.03 on Monday.

Walmart shares, on the other hand, had closed at $142.64 on Monday but rose 12% to $159.88 at its open on Tuesday.

Trading in these shares was halted almost immediately and reopened within 15 minutes. Other big names affected included shares of ExxonMobil, McDonalds and 3M.

The NYSE attributed the price swings to a “system glitch,” according to a post on Tuesday. The exchange explained in several updates that the glitch resulted in the NYSE not holding “opening auctions” for the affected stocks. The process, based on supply and demand, uses a computer to determine the opening prices of shares.

However, the system issue “resulted in continued trading in those securities beginning at 9:30 am without an opening auction imprint,” the NYSE said in a statement. This, in turn, caused the shares to start trading at unusually high or low prices.

The New York Stock Exchange said it was canceling unusual trades made before price limits were applied to curb volatility, according to Bloomberg.

“Such events are extremely rare, and we are closely examining the day’s activity to ensure the highest level of resiliency in our systems,” Michael Blaugrund, NYSE’s chief operating officer, told Bloomberg in a statement. “We end the day with a normal market close and expect a regular open on Wednesday.”

Shares of the Intercontinental Exchange, which owns the NYSE, closed down 2.22% at $106.25 on Tuesday.

The US Securities and Exchange Commission told Bloomberg that it is investigating the episode.

The NYSE and SEC did not immediately respond to Insider’s requests for comment outside of regular business hours.

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