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Last updated: August 23. 2013 8:37AM - 800 Views
The Associated Press



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NEW YORK — A glitch that stopped trading on the Nasdaq also hurt the stock of the exchange’s owner.


The technical problem halted trading for about three hours Thursday. Full trading resumed at about 3:25 p.m. on the Nasdaq, a major stock exchange dominated by the biggest names in technology.


Nasdaq OMX Group Inc. stock — which trades on the Nasdaq — fell 3.5 percent to $30.45 late Thursday afternoon.


The glitch and the trading halt raise questions about the pitfalls of computer-driven stock trading and echo other stock market snafus from the past few years. The “flash crash” in 2010 caused the Dow Jones industrial average to drop nearly 600 points in five minutes.


The trading glitches can also be costly to an exchange. Nasdaq in May agreed to pay a $10 million penalty to settle federal civil charges after regulators said its systems and decisions disrupted Facebook’s initial public stock offering. The company set aside $62 million in the first quarter to reimburse investors who lost money due to technical glitches during Facebook’s IPO.


Thursday’s disruption sent brokers scurrying to figure out what went wrong and raised new questions about the pitfalls of computer-driven stock trading.


The Nasdaq shutdown appeared to occur in an orderly fashion and didn’t upset other parts of the stock market.


In Washington, President Barack Obama and Treasury Secretary Jacob Lew were being updated on the situation. The Securities and Exchange Commission said it was in “close contact” with the exchanges.


The days of stock brokers in colorful jackets, roaming the floor of the stock exchange, are fading. Now, powerful computer programs dominate trading by sifting through reams of data and executing trades in fractions of a second. That makes trading faster and, arguably, more efficient. But it also introduces more possibilities for errors that can jolt the entire market.


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