NEW YORK – Nasdaq fixed computer glitches that forced an embarrassing one-hour trading outage an Friday but stocks whose closing prices were reported incorrectly last week gave traders headaches on Monday.
``There's still some turmoil from Friday's close, especially on the Nasdaq, not so much on the Dow, but on the S&P and certainly on the Russell you're seeing a lot of adjustment that seems to be occurring because of the Nasdaq problems,'' said Edgar Peters, chief investment officer at Boston-based Panagora Asset Management Inc., which oversees $15 billion in assets.
The system failure caused at least 20 Nasdaq stocks to close with incorrect prices on Friday. Nasdaq, which did not provide a complete list of stocks that closed with faulty prices, said it analyzed the prices over the weekend and made necessary changes.
All systems had been operating normally throughout the trading day on Monday, according to Nasdaq's Web site.
Friday's outage crippled Nasdaq's network, which is operated by telecommunications company WorldCom Inc.. The problems started when a WorldCom employee ran a test on the network that processes orders from Nasdaq's share dealers.
Nasdaq suspended trading on its SOES (Small Order Execution Service) and SelectNet stock order routing systems from 2:31 p.m. EDT to 3:33 p.m. EDT. The exchange then extended trading until 5 p.m. EDT .
During the failure, Nasdaq stocks, such as Dow component Intel Corp., could still be traded on alternative trading systems such as electronic communications networks (ECNs), but investors could not access share dealers -- called market makers -- who handle the highest volume.
Because the most active dealers were shut out of the market, stocks were more susceptible to severe price swings.
Nasdaq, which trades around 2 billion shares daily, has experienced system glitches in recent months that have interrupted trading for short periods of time on at least three occasions. A new trading system, nicknamed SuperSOES, is scheduled to be implemented on July 8. SuperSOES, which Nasdaq has said has performed well in testing, enables traders to process more trades automatically.
The New York Stock Exchange, Nasdaq's chief rival, also suffered an embarrassing trading outage recently. A software failure forced the Big Board to shut down its storied trading floor for 85 minutes on June 8.
But despite the recent failures, U.S. regulators declined to say if they planned to keep a tighter rein on the stock markets.
``We scrutinize them closely all the time,'' U.S. Securities and Exchange Commission Spokesman John Heine said. ``We monitor them closely all the time. We're always watching.''