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NYSE resumes trading after unprecedented shutdown

The New York Stock Exchange reopened Wednesday after an unprecedented, nearly four-hour halt in trading that authorities said was caused by a major technical glitch.

The freeze in trading at one of the world’s largest exchanges was highly unusual. A U.S. official told The Washington Post that there was “no indication” that the problems were the result of a cyberattack. The person, speaking on condition of anonymity, added that the incident “seems like a technical issue.”

Stocks stopped trading just around 11:32 a.m. Eastern time and resumed trading three hours and 38 minutes later at 3:10 p.m. The NYSE said that all orders made during the freeze would be canceled. But trading continued on other exchanges, and Nasdaq officials said at noon that the index’s trading systems were operating normally.

What average investors should know about the New York Stock Exchange closure

In a statement during the halt, the NYSE said: “We’re experiencing a technical issue that we’re working to resolve as quickly as possible. We’re doing our utmost to produce a swift resolution & will be providing further updates as soon as we can.”

The scene on the floor of the NYSE after trading was halted

epa04837378 Floor officials and traders talk on the floor of the New York Stock Exchange after trading was halted due to a technical glitch in New York, New York, USA, 08 July 2015. EPA/JUSTIN LANE (Justin Lane)

U.S. markets had dipped slightly before the outage amid worries that falling Chinese stocks would ripple throughout the global economy.

They ended the trading day in negative territory. The Standard & Poor’s 500-stock index fell about 1.7 percent, and the Dow Jones industrial average closed down about 1.5 percent.

Wednesday was a day for technical problems. The outage at the NYSE came just hours after United Airlines temporarily grounded its flights due to what the company said was a "network connectivity issue." NBC News quoted two unnamed U.S. officials as saying that there was no indication that the market shutdown was related to the grounded airplanes.

And at about the same time as the NYSE freeze, the Web site of the Wall Street Journal went down. The site was back up by 1:30 p.m.

“Well, I’d like to know some more information,” Sen. Charles E. Schumer (D-N.Y.) told reporters at the Capitol. “To have three outages in three important places in the same day raises a lot of questions. I haven’t gotten answers yet.”

Asked about the “coincidence” of three major technical failures in a single day, FBI Director James Comey told the Senate Judiciary Committee that the incidents had “obviously that caught my attention.”

“We’re not big believers in coincidence either. We’ve been in contact with all three companies to see what’s going on,” Comey said. “We do not see any connection to a cyber breach or a cbyer attack…It does appear that it’s not a cyber intrusion.”

The NYSE problems came at a time when regulators have struggled to cope with the technological revolution that has transformed trading from a human-centric endeavor to one driven by computers.

One of the most high-profile events came in May 2010 “flash crash,” when the stock market plunged nearly 1,000 points in minutes, then jumped back up. Other glitches followed, including the runaway trades linked to faulty computers at Knight Capital in 2012. Technical problems halted trading in Nasdaq-listed stocks for more than three hours in 2013. Facebook’s debut on the Nasdaq exchange was delayed considerably in May 2012 when technical issues marred the company’s initial public offering.

A very brief history of stock markets being shut down

This appeared to be the first time the NYSE had come to a standstill since June 1, 2005, when trading was stopped four minutes before closing "due to a systems communications problem," according to the NYSE.

Ted Weisberg, who has traded on the exchange floor for nearly five decades, said his brokerage firm, New York-based Seaport Securities, was able to keep trading on other exchanges, which were not affected by the glitch.

“It’s not the first time, and it won’t be the last time,” Weisberg said. “You rely on computers, and computers break.”

At the White House daily briefing, press secretary Josh Earnest said homeland security adviser Lisa Monaco and White House Chief of Staff Denis McDonough briefed President Obama on the technical problems at the stock exchange.

He said Monaco told Obama during the stoppage that “at this point there is no indication that malicious actors are involved in these technical issues.” Earnest said NYSE officials have been in close touch with the Department of Homeland Security, the Securities and Exchange Commission and the Treasury Department and that the NYSE was “working feverishly to resolve the situation.” Obama asked his aides to keep him updated through the day.

More broadly, Earnest said: “The administration is keenly aware of the risk that exists in cyberspace right now. There are a number of steps this administration has taken to improve communication between the private sector and the federal government in terms of safeguarding cyberspace.”

“At this point it’s unclear what kind of impact this glitch will have” on investors, Earnest said. After the problem is resolved, the administration will “take a closer look” at the impact. “At this point, it’s too early to offer an assessment about that.”

Earnest said Obama was also briefed on United Airlines’ technical problems, but he said he did not know whether Obama was told of the Wall Street Journal’s Web site crash.

The SEC, whose job it is to police the markets, issued a brief statement from its chairwoman, Mary Jo White. She stressed that while the NYSE was in limbo, stocks continued to "trade normally through other trading venues."

David Nakamura and Ellen Nakashima contributed to this report.

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