Nasdaq resolves two-hour technical glitch impacting connectivity
The Nasdaq logo is displayed at the Nasdaq Market site in Times Square in New York City, U.S., December 3, 2021. REUTERS/Jeenah Moon
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By Niket Nishant
(Reuters) -Nasdaq, which lists shares of some of the biggest U.S. tech giants on its exchange, said on Monday it had resolved a technical glitch that affected connectivity for more than two hours and that all systems were back up and operating normally.
The company did not give details about the severity of the problem, its second technical glitch in months, but said it was related to the matching engine – software systems that match buy and sell orders. The incident started around 4.55 a.m. ET, according to the exchange’s website.
The Nasdaq is home to thousands of stocks, including those of iPhone maker Apple (NASDAQ:AAPL), electric vehicle-maker Tesla (NASDAQ:TSLA) and semiconductor powerhouse Nvidia (NASDAQ:NVDA).
Technical glitches on exchanges can roil markets, hit traders’ confidence and attract scrutiny from the Securities and Exchange Commission.
Some stocks showed unusually wide spreads – the gap between what buyers bid for a stock and sellers’ asking price – with the ask price, in some cases well below the bid price, pointing to poor market liquidity, said Seth Golden, president of investment research firm Finom Group.
“The ‘ask’ was below the bid, consistently since 5:00 a.m. ET for a majority of stocks … some spreads had the ‘ask’ lower by as much as $1/share,” Golden said.
Outside of that, there was no noticeable effect from the outage, he said.
“The Nasdaq stock market has resolved its earlier matching engine issues and all systems are operating normally. Nasdaq will provide a full postmortem when available,” the company said on its website. It did not immediately respond to a request for further comment.
OTHERS DECLARE SELF-HELP
The issue also led to self-help declarations against Nasdaq from Cboe and the New York Stock Exchange (NYSE). Both were revoked later.
A “self-help” is a notification issued by a trading exchange when another exchange is dealing with internal problems processing trades and orders are routed through alternate venues.
The glitch at Nasdaq impacted orders sent using the “RASH FIX” order handling system. FIX, or Financial Information Exchange, is a message protocol that defines an electronic message exchange for communicating securities transactions between two parties.
Outages at major exchanges have been largely contained in recent years. Art Hogan, chief market strategist at B Riley Wealth, said the technical error at Nasdaq should “pose no ongoing problems.”
“This problem occurred in the very quiet premarket hours, and was quickly resolved,” he said.
Nasdaq was hit by a system error in December, when stock orders were impacted and over 50 clients at the exchange were affected.
Its rival NYSE also suffered a glitch last year that prevented the opening auctions for a slew of stocks, prompting widespread trading halts, confusion over whether orders were being filled at correct prices and trades in more than 250 securities being busted.
