Affected stocks include Altria Group, MasterCard, McDonald's, Uber, Wells Fargo, Verizon, Rio Tinto, Shell, AT & amp； T, Lilly, Mosaic, Wells Fargo, Nike, 3M, Newmont Mining, Union Pacific, Sony, United Parcel Service, Valero Energy, Western Petroleum, Royal Dutch Shell, MetLife, Visa, Wal-Mart, ExxonMobil and many other large companies and active stock.
The technical failure lasted about 10 minute, and many affected companies resumed trading within 15 minute of opening.
Twenty minutes after the opening of the new york Stock Exchange, at about 9: 50 am EST on Tuesday, it said, "All systems on the NYSE are now operating normally."
The NYSE subsequently issued a second statement before 1 1 a.m. EDT. The NYSE said that the exchange will continue to investigate the problems in the opening bidding process, and some trading products have not been opened for bidding. The NYSE is trying to determine the stock list. Affected member companies may consider submitting "obvious mistakes" or claims as stipulated in 18.
"Obvious error" means that the NYSE will determine that the initial price of the affected stock is invalid and the subsequent price is the "correct" opening price.
Later that day, the new york Stock Exchange issued the third press release on the failure of the opening trading. According to NYSE, 2,565,438+0 stocks were affected by this technical failure. There is no public bidding for these stocks. Therefore, the opening price of many companies is quite different from the closing price of the previous day. Due to market fluctuations, many stocks were suspended immediately and reopened at a price close to the previous day's closing price in a few minutes.
According to NYSE rules, a series of stock transactions will be regarded as "obvious mistakes". In a press release, the new york Stock Exchange also said that it would cancel a few transactions that occurred shortly after the opening and mark other transactions as "abnormal", which would exclude these transactions from the calculation of the highest and lowest prices of the day. These adjustments will be made to the public data after the transaction is completed.
What happened?
The new york Stock Exchange opens at 9: 30am EDT every day, and the opening price is before that. There is only one opening price, which is determined by thousands of orders to buy and sell a single stock. These orders are summarized into a single "account book" for each stock to measure the overall supply and demand, and then a single price is quoted at the opening price, and all orders are summarized into spreadsheets.
The purpose of public bidding is to limit the fluctuation caused by the accumulation of stock orders before normal trading hours. The final opening price can be regarded as the level to satisfy as many traders as possible.
But for some reason, it seems that many orders for buying and selling stocks did not enter the order book to determine the opening price on Tuesday, and some trading varieties did not bid at the opening price. As a result, due to the imbalance between supply and demand, the opening volume of many stocks is very low, and the opening price is far lower than the closing price on Monday.
To give two examples: Mosaic closed at $48.35 on Monday, but only reported $40.29 when it first opened on Tuesday, plunging by about 16%. Trading then stopped almost immediately and reopened at 9: 43 am for $48.
Wal-Mart closed at 142.64 USD on Monday and opened at 159.88 USD on Tuesday, up 12%. The stock was suspended almost immediately, and resumed trading at 9:40 am EST at 14 1.5 1.
84 stocks were once suspended.
The failure caused violent fluctuations and trading suspension, which caused the stock prices of dozens of large American companies to plummet or soar. In some companies, the difference between high and low points is as high as 25% in just a few minutes, and banks, retailers and industrial enterprises are all affected.
Like some other global exchanges, the NYSE has set up a suspension mechanism for the rise and fall of individual stocks. At the opening of each day, the "LULD" band of individual stocks will be announced immediately to determine the price at which the trading of stocks is suspended due to fluctuations. If the transaction is above or below this range, the LULD mechanism will be triggered.
According to statistics, on Tuesday, at least 84 stocks on the NYSE were suspended due to fluctuations within a few seconds of opening, which triggered the "daily limit-daily limit" mechanism of individual stocks.
According to the NYSE, all stocks affected by the suspension under the "price limit-price limit" mechanism will be cancelled from 9: 30, and then traded outside the scope of LULD for the first second. They are considering marking all stocks affected by LULD's suspension after 9:30:0 1 to 9:30:45 as abnormal. Under abnormal conditions, the transaction will still be established, but the price will not affect the level of the stock on that day.
There is no doubt that the major technical failure of the new york Stock Exchange last night plunged Wall Street into great chaos.
R. J.Grant, who is in charge of handling Morgan Stanley stock trading in KBW, an investment bank, once saw eight alarms go on at the same time, informing him that the stock price plummeted by more than 10% in a few minutes. His company didn't have any big orders on the affected stocks, but a large number of calls from customers, analysts and salespeople flocked to try to find out the problem.
Grant said, "This looks crazy. Obviously, something is wrong. If these stocks open at this price and continue to trade, people will frantically try to buy stocks that have fallen sharply. "
DennisDick, founder of the trading company TripleDTrading, said, "This is really a mess. I have been trading for 22 years and have never seen the opening of the NYSE so out of control. "
Has there ever been a similar scene in American history?
The turmoil that NYSE encountered when it opened on Tuesday undoubtedly reminded many people of the "lightning crash" that happened on 20 10.
On May 6th, 20 10, when the American stock market was gradually recovering from the financial crisis and was in the early stage of the bull market near 1 1, the Dow Jones Industrial Average fell nearly 700 points in just a few minutes that day, instantly erasing the market value of about 1 trillion dollars. This scene that shocked everyone at that time led some market participants to complain that increasingly automated transactions constituted systemic risks. Some people think that such a shocking market crash is an abnormal value and need to add additional guardrails to avoid repeating the same mistakes.
Many people compare the "flash crash" of that year with the Wall Street crashes of 1987 and 10. Of course, unlike the Black Monday crash of 1987, the "flash crash" was largely considered to be preventable through more intervention, and then the US Securities and Exchange Commission quickly made some remedial measures for the details and promised to investigate the increasingly complex and scattered stock market. In addition, a special expert committee made suggestions on how to prevent another flash crash.
20 1 1 One of the measures taken is to set up a single stock fuse mechanism, that is, any stock or ETF that fluctuates more than 10% within 5 minutes will suspend trading for 5 minutes. In 20 12, this rule was replaced by the "daily limit-daily limit" (LULD) of individual stocks, which stipulated that if the trading of a stock exceeded a specific range based on rolling price, the trading of the stock would be suspended.
At the same time, in 20 14, the securities and exchange commission of the United States adopted a set of rules called RegSCI, requiring exchanges to be responsible for such trading interruptions.
Since then, the scene of technical failure of the exchange is not common. The last time was July 2065438+2005, and the NYSE closed its trading for nearly 4 hours due to technical failure. 20 13 Chicago Board Options Exchange suspended trading twice in a week. But before Tuesday's technical problems, major failures in recent years were basically under control.
According to an SEC spokesperson, SEC staff are still reviewing information related to Tuesday's suspension.
New york Stock Exchange said that due to system problems, some transactions were declared invalid.
The NYSE announced that some transactions were invalid, saying that more than 250 stocks were affected by technical failures.
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