Updated March 18th, 2024 at 19:02 IST

Nasdaq resolves two-hour technical glitch affecting connectivity

Nasdaq swiftly addressed the issue and announced the resolution on its website, promising a detailed postmortem analysis to follow.

Reported by: Business Desk
Nasdaq hosts thousands of stocks, including those of well-known companies like Apple, Tesla, and Nvidia. | Image:Nasdaq
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Nasdaq announced on Monday that it had successfully addressed a technical issue that disrupted connectivity for over two hours. The exchange assured that all systems were fully operational once again.

Details regarding the severity of the problem were not disclosed by the company, which marked its second technical glitch within a few months. Nasdaq attributed the issue to its matching engine, the critical software responsible for matching buy and sell orders. The incident commenced around 4:55 a.m. ET, according to the exchange's website.

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Nasdaq hosts thousands of stocks, including those of well-known companies like Apple, Tesla, and Nvidia.

Technical disruptions on exchanges have the potential to unsettle markets, dent traders' confidence, and draw scrutiny from regulatory bodies such as the Securities and Exchange Commission (SEC).

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Seth Golden, President of investment research firm Finom Group, noted that during the glitch, certain stocks exhibited unusually wide spreads between bid and ask prices, indicating poor market liquidity.

Despite the disruption, there were no major repercussions observed outside of these anomalies, according to Golden.

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Nasdaq swiftly addressed the issue and announced the resolution on its website, promising a detailed postmortem analysis to follow. The company did not provide further commentary immediately upon request.

The technical hiccup prompted self-help declarations against Nasdaq from other exchanges, including Cboe and the New York Stock Exchange (NYSE), although these were later rescinded.

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The glitch affected orders routed through the "RASH FIX" order handling system, a component of the Financial Information Exchange (FIX) protocol used for securities transaction messaging.

While outages at major exchanges have been relatively rare in recent years, Art Hogan, Chief Market Strategist at B Riley Wealth, expressed confidence that Nasdaq's technical error should not have any lasting impact.

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Hogan noted that the incident occurred during the quiet premarket hours and was promptly resolved.

Nasdaq previously encountered a system error in December, impacting stock orders and affecting over 50 clients. Similarly, its rival NYSE experienced a glitch last year, resulting in trading halts and order confusion for numerous stocks.

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(With Reuters inputs)
 

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Published March 18th, 2024 at 19:02 IST