The Nasdaq composite index, symbol of
the roaring "new economy" stocks, froze for about 2-1/2 hours
on Friday on a technical glitch, leaving investors clueless
about the direction and movement of the technology-saturated
The problem was later traced to a computer cable connected
to a mainframe computer at Nasdaq's technical center in
Trumbull, Conn., a Nasdaq spokesman said. He said no further
information was immediately available on the problem.
At about 11:30 a.m. EST, the composite index
stopped updating, and it remained stuck at 4535.5, a constant
13.4 point decline, before resuming movement shortly after 2
p.m., with a sharp drop of nearly 75 more points to
In subsequent afternoon trade, the composite continued to
stumble, losing 110 points, or 2.43 percent. Earlier in the day,
the reading had reached an all-time intraday high of 4564.45.
Detailing the breakdown, Nasdaq spokesman Scott Peterson,
said that users of the Nasdaq Workstation II, the Nasdaq's
primary trading device mainly market makers and order-entry
firms were not receiving the last prices for securities with
ticker symbols beginning with the letters "A" through "J."
"Although the last sale prices were not being disseminated
on (the Nasdaq Workstation II), the (updated) information was
still available to the public, as the information was reaching
market-data vendors" such as the Associated Press, Reuters
Group Plc, Bridge Information Systems and
Bloomberg LP, he said.
The glitch that froze the index was annoying the traders at
Carlin Financial Group but causing them no real pain, said Mayer
Offman, a partner at the New York-based stock trading firm.
The problem was, however, rattling investors and helping
create uncertainty in the market, Offman said. Such woes are a
reminder that computer problems can wreak havoc on an already
highly volatile market, he said.
"I think it is having an effect on the market," he said.
"I think people are afraid of hackers," he said. "It's not
affecting trading of individual stocks, but it's causing the
markets to go down."