BackNYSE’s Thain says all is ‘going well’ with trading
NYSE's Thain says all is 'going well' with trading
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By Gray and Ortega, Bloomberg
New York Stock Exchange trading systems performed smoothly as the world’s largest equity market recovered from computer problems earlier this week that slowed transactions as indexes plunged, the head of the exchange said.
“Everything is going well with the trading systems," NYSE Group Inc. Chief Executive Officer John Thain said on Thursday as he walked near the trading post for Merck & Co. a half-hour before the market closed.
About 2.2 billion shares changed hands at the Big Board today, 45 % more than the three-month daily average. It was the first time the NYSE handled more than 2 billion shares on three consecutive days since July 2002, when the Standard & Poor’s 500 Index neared the trough in a two-year bear market that wiped out 49 % of the index’s value.
The increased trading has strained systems at the NYSE and its rival Nasdaq Stock Market Inc. A sudden plunge in the value of Dow Jones Industrial Average in the final hour of trading on 27 February sparked a wave of orders that overwhelmed the Big Board’s electronic systems.
Floor brokers had to step in with pad and paper to complete some transactions as the markets fell. Last year, as brokerages increasingly relied on automated trading, the ranks of licensed floor brokers declined 16% to 1,066, according NYSE data.
NYSE Group has responded to the problems by doubling its capacity to process electronic trading messages between brokerages, Thain told cable news network CNBC yesterday. The exchange handled a record number of messages yesterday, he said.
Floor Brokers
Some brokers on the floor of the NYSE said today their handheld computers processed trades more slowly than usual. The Nasdaq Stock Market reported intermittent delays in disseminating trade data the past three days. The National Stock Exchange, based in Chicago, plans to fix computer problems that have affected trading by next week, spokeswoman Bonnie Greenberg said.
The technological breakdowns haven’t dissuaded investors from sending orders to floor brokers, said Doreen Mogavero, president of Mogavero Lee & Co. and a Big Board trader for almost 27 years.
“Whenever there’s uncertainty in the market, people are more comfortable talking to people, so we do a lot of business," she said.
During a conference call with investors today, Thain denied regulators were investigating whether computer problems worsened the 27 February market drop, according to a report by Prudential Equity Group analyst Robert Rutschow, who hosted the event.
The Wall Street Journal today reported the Securities and Exchange Commission is examining whether the exchange failed to add capacity at newly refurbished trading posts, citing a person familiar with the matter.
“We have been in dialogue with the SEC, but we are not aware of an inquiry as described by the Wall Street Journal," NYSE spokesman Richard Adamonis said today.
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