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4B Daily News – Friday, August 23, 2013 Nasdaq trading halts for 3 hours due to glitch NEW YORK (AP) — A mysterious technical glitch halted trading on the Nasdaq for three hours Thursday in the latest major electronic breakdown on Wall Street, embarrassing the stock exchange that hosts the biggest names in technology, including Apple, Microsoft and Google. The problem sent brokers racing to figure out what went wrong and raised new questions about the pitfalls of the electronic trading systems that have come to dominate the nation's stock markets. Nasdaq said only that the problem lay in its system for disseminating prices. An investigation was underway. The outage disrupted what had otherwise been a quiet summer day on Wall Street. It was another in a series of technical problems to disrupt financial markets, though less alarming than the ''flash crash'' that set off a stock-market plunge in May 2010. ''The market has gotten quite complex and needlessly so,'' said Sal Arnuk, co-founder of the brokerage Themis Trading. The Nasdaq, a stock exchange dominated by some of the largest, most prosperous technology companies, sent out an alert shortly after noon that said it would stop trading. The Nasdaq composite index spent much of the afternoon stuck at 3,631.17. Trading resumed at 3:25 p.m. Thirty-five minutes later, the day ended day with the index up 38 points, or 1 percent, at 3,638.71. Investors are not at risk of losing any money from these glitches unless they are unlucky enough to be buying or selling a stock at the exact moment when an error occurs, forcing them to cancel their trades. ''Clearly it's an annoyance, but it doesn't in any way affect the value of your underlying assets,'' said Marty Leclerc at Barrack Yard, chief investment officer at Barrack Yard Advisors, an investment adviser. ''Warren Buffet used to say that if you own a stock you ought to be comfortable with it even if the market were to close for a year.'' During the outage, the Nasdaq said it wouldn't cancel any orders stuck in limbo, but that customers were free to cancel their orders before trading resumed. The shutdown did not upset other parts of the stock market. But one stock that did take a hit was the parent company of the exchange, Nasdaq OMX, which fell $1.08, or 3.4 percent, to close at $30.46 in heavy trading. The White House, the Treasury Department and other government AP photo A Times Square electronic display as seen Thursday afternoon. agencies said they would monitor the disruption. Brad McMillan, chief investment officer of the independent brokerage Commonwealth Financial, said competition between rival exchanges for customers was partly to blame. The exchanges try to bring in more business with the promise of faster trading, which makes them more reliant on new technology. ''The more trading is tied to technology, the more computer crashes matter,'' McMillan said. He said he was not overly concerned about Thursday's disruption, recalling a day in August 1994 when a mischievous squirrel caused a brief closure of Nasdaq by chewing into power lines near the stock market's computer center in Trumbull, Conn. The shutdown was another sign that the days of stock brokers in colorful jackets roaming the floor of the stock exchange have faded away. Now powerful computer programs dominate trading by sifting through reams of data and executing trades in fractions of a second. That makes trading faster and, arguably, more efficient. But it also introduces more possibilities for errors that can jolt the entire market. Last year, BATS Global Markets tried to go public on its own exchange but had to back out after a computer error sent the stock price plunging to just pennies. Facebook's public offering last spring was also error-riddled, as technical problems kept many investors from knowing if their trades had gone through and left some holding unwanted shares. And in April, the Chicago Board Options Exchange shut down for a morning because of a software problem. Then there was the 2010 ''flash crash'' in which the Dow Jones industrial average fell hundreds of points in minutes before eventually closing 348 points lower. It was one of the first major blips that brought the potential dangers of computerized trading into the public sphere. One of the lessons from the flash crash was that it's better to stop trading and re-open a market in a fair and orderly manner than to have messy trading, said James Angel, a finance professor at Georgetown University who specializes in the structure and regulation of financial markets. ''I think people are so used to the fact that every once in a while the power goes out and a computer crashes,'' Angel said. ''As long as the trading is fair and orderly I don't think that's going to deter people from investing.'' Trading glitches can also change fortunes. A technical bug spelled the end for Knight Capital as a stand-alone company and marred its long-standing reputation as a stellar risk manager after the problem sent stocks of dozens of companies swinging wildly on Aug. 1 of last year. It also left Knight, which takes orders from big brokers like TD Ameritrade and E-Trade, on the hook for many of the stocks that its computers accidentally ordered. Knight teetered near bankruptcy and this summer was taken over by the high-speed trading firm Getco. WALL STREET NEW YORK (AP) — The stock market rose Thursday, but it was a glitch on the Nasdaq exchange that became the day's big talking point. Trading on the Nasdaq was interrupted just after midday because of problems with a quote dissemination system. That halted activity on the Nasdaq until shortly before the close of the market. When trading resumed, shares in Nasdaq OMX, which owns and operates the exchange, slumped. The Nasdaq composite was up 31 points, or 0.9 percent, at 3,631 when trading halted, according to FactSet data. It ended the day up 38 points, or 1.1 percent, at 3,638.71. Earlier on Thursday, encouraging economic figures from Asia and Europe helped stocks advance and break a six-day losing streak for the Dow Jones industrial average. In China, a survey by HSBC indicated that manufacturing was expanding, the latest evidence that the world's second-largest economy may be over its recent period of weakness. In Europe, a survey of manufacturing and services for the 17 countries that use the euro climbed to its highest level since June 2011. ''Europe seems to be getting its swing back, especially Germany,'' said Doug Cote, chief market strategist at ING U.S. Investment Management. The figures ''are not super exciting, but directionally they are good.'' The stock market has had a poor August. Traders and investors have fretted that the Federal Reserve is about to start easing back on the economic stimulus that has helped underpin a 4 1/2-year bull market. The Fed is buying $85 billion of bonds a month to hold down long-term interest rates. The Dow climbed 66 points, or 0.4 percent, to close at 14,963.74. The index is still down 3.5 percent for the month. The Standard & Poor's 500 index rose 14 points, or 0.9 percent, to 1,656.96, its best day since Aug. 1. Investors also got some encouraging news on the U.S. economy Thursday. A gauge of the economy's health rose in July, pointing to stronger growth in the second half of the year. The Conference Board's index of leading indicators increased 0.6 percent last month to a reading of 96. The index was unchanged in June and rose 0.2 percent in May. The number of Americans applying for unemployment benefits rose last week but remains close to its lowest level in 5 1/2 years. Applications for first-time benefits rose 13,000 to 336,000 in the week ending Aug. 17, the Labor Department said. That's up from 323,000 in the previous week, which was the lowest since Jan. 2008. ''The economy in general is showing signs of modest improvement,'' said Terry Sandven, chief equity strategist, at U.S. Bank wealth management. ''Valuation is fair, sentiment is favorable and inflation is benign and that's a favorable backdrop for equities.'' The market rose despite some poor results from a pair of retailing companies. Sears dropped $3.55, or 8.2 percent, to $39.72 after the company said its second-quarter loss widened as the number of stores in operation declined and the company dealt with lingering effects from its spinoff of the Hometown and Outlet brand. Abercrombie & Fitch fell $8.27, or 18 percent, to $38.53 after the company said that declining traffic and weakness in girls' clothing pushed its net income down 33 percent in the second quarter. The yield on the 10-year Treasury note rose to 2.90 percent from 2.89 percent Wednesday. The yield is the highest it's been since July 2011, and is up sharply since going as low as 1.63 percent in early May. Rising bond yields have unsettled stock investors because they have a direct impact on the cost of borrowing for everyone, from home owners trying to refinance their mortgages to companies trying to sell debt, making them a potential long-term drag on the economy. An Independently owned and operated Member of Coldwell Banker Residential Affiliates. The busiest local information website in Tehama County! 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