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NYSE glitch sparks volatility in dozens of stocks

Traders and floor officials react to technical issues on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., June 3, 2024.  REUTERS/Brendan McDermid

Traders and floor officials react to technical issues on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., June 3, 2024. REUTERS/Brendan McDermid

A glitch at the New York Stock Exchange (NYSE) triggered massive swings in the shares of Berkshire Hathaway and Barrick Gold, and trading halts in dozens of other companies on Monday, before the problem was fixed.

The NYSE, owned by Intercontinental Exchange, by late morning said a technical issue had been resolved and that the impacted stocks had resumed trading.

It was the second stock market hiccup in less than a week after a glitch last Thursday affected the dissemination of real-time data for the S&P 500 and Dow Jones indexes for over an hour.

The NYSE said in a statement that it and other exchanges were canceling all erroneous trades in Berkshire Hathaway’s class A shares related to the glitch from 09:50-9:51 ET, at or below $603,718.30 per share.

The NYSE also said it was canceling erroneous trades in Nuscale Power, Barrick Gold, Chipotle Mexican Grill and other stocks that were impacted by a technical glitch. Overall, it was reviewing trades in about 40 securities.

Berkshire Hathaway and Barrick Gold at one point were shown to be down 99.97% and 98.54%, respectively, due to a technical issue, before those trades were corrected.

After trading resumed, Berkshire Hathaway closed 0.6% higher at $631,110.10, and Barrick Gold climbed nearly 2% to $17.42.

The S&P 500 ended the day up 0.1%.

The Consolidated Tape Association (CTA), responsible for disseminating real-time trade data on stock exchanges, said Monday’s problem related to a new software release at one of its data centers.

The CTA said it resolved the issue by switching to a secondary data center running the previous version of the software.

Some of the stocks halted on the NYSE showed unusual outsized movements.

Berkshire, Barrick Gold and Chipotle did not respond to requests for comment about Monday’s technical problem.

The NYSE and the CTA said the problem was related to limit up-limit-down bands meant to prevent extraordinary market volatility and extreme price movements in individual stocks by preventing trades outside of specific price ranges.

The price band for each security is set at a percentage level above and below its average price in the preceding five minutes.

The bands were developed as part of the response by financial regulators and exchanges to the “flash crash” of 2010, which briefly wiped out nearly $1 trillion in market capitalization in a few minutes.

On May 6, 2010, when equities were recovering from the financial crisis and in the early stages of what would become a near 11-year bull market, the Dow Jones Industrial Average tumbled almost 700 points in minutes.

Exchange outages, caused by software and hardware glitches, cyberattacks, and even hungry squirrels, have roiled markets and shaken investor confidence for decades, as trading has moved from the floors and pits of bourses to electronic systems that match trades at nearly the speed of light.

In February 2023, the NYSE said it would reimburse investors for losses due to a glitch that caused widespread confusion and resulted in thousands of trades being nullified.

The NYSE did not respond to a request for comment about whether it would reimburse investors potentially affected by Monday’s issue.

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