We've been trying to get to the bottom of exactly how many of these so-called computer "glitches" affected the market reporting and trading systems yesterday. Immediately after close, the Dow Jones Company was reporting one "glitch" in the system that calculates the various Dow Jones indexes while NYSE and NASDAQ were remaining mum.
But our trader friend was telling us about further problems, including a a slow down in getting trades processed. And now we've got the official report of a second glitch or a series of glitches caused by the high volume of trades.
The sudden plunge fueled a wave of new orders that overwhelmed systems at stock exchanges in the final hour of trading. Warren Meyers, a managing director at NYSE brokerage Walter J. Dowd Inc., started scribbling trades on paper after the delays made it impossible to determine the fate of an electronic order. He ended up with more shares than he wanted.
So the official story seems to be that the high volume sell-off triggered problems with the Dow Jones systems, which then created an illusionary instant sell-off around 3PM, which triggered more selling and fouled up the electronic trading systems at the stock exchanges.
It's a nice story if they can get it to stick. Pay no attention to the sell-off behind the curtain. Keep looking at the malfunctioning electronic images. And for godsakes keep that yappy little dog under control, Dorthy!
Bad Data Spur Market Doubts Among U.S. Investors [Bloomberg]