Nbadan
02-27-2007, 06:22 PM
Technical glitches plague Wall Street
Dow Jones says problem with DJIA reporting caused dramatic decline; NYSE says trading was interrupted due to intermittent technical problems.
NEW YORK (CNNMoney.com) -- As the Dow Jones industrial average suffered its biggest one-day point loss in 5-1/2 years Tuesday afternoon, traders were blind to the severity of the fall due to technical problems.
"Around 2:00 pm today the market's extraordinarily heavy trading volume caused a delay in the Dow Jones data systems and as a result, the calculation of the Dow Jones Industrial Average temporarily lagged behind the market decline and as we identified the problem we decided to switch over to a back-up system and the result was a rapid catch-up in the published value of the Dow Jones Industrial Average," explained a Dow Jones spokeswoman.
When the back up system was activated around 3:00pm, the delay was eliminated and the numbers on the big board caught up immediately with market activity.
"The drop lag that occurred in a minute should should have happened over a period of 20, 30 or 40 minutes," the spokeswoman said.
CNN Money (http://money.cnn.com/2007/02/27/markets/dow_drop/index.htm)
Maybe I'm wrong here, but if this ' technicle glitch' was that sell orders weren't getting processed while that would make a drop steeper once the sell orders did go through, wouldn't also that tend to minimize the total daily drop in stock prices, since people didn't realize that others were selling, hence less panic-driven sales?
I mean, from what I've read, they haven't alleged that the 'glitch' created sales transactions out of thin air -- it just backed them up for awhile, making the market appear more stable than it actually was at that hour. Thus, fewer people were motivated to sell than perhaps would have been if the market had more gradually descended to the level it finally did by the end of the day.
Dow Jones says problem with DJIA reporting caused dramatic decline; NYSE says trading was interrupted due to intermittent technical problems.
NEW YORK (CNNMoney.com) -- As the Dow Jones industrial average suffered its biggest one-day point loss in 5-1/2 years Tuesday afternoon, traders were blind to the severity of the fall due to technical problems.
"Around 2:00 pm today the market's extraordinarily heavy trading volume caused a delay in the Dow Jones data systems and as a result, the calculation of the Dow Jones Industrial Average temporarily lagged behind the market decline and as we identified the problem we decided to switch over to a back-up system and the result was a rapid catch-up in the published value of the Dow Jones Industrial Average," explained a Dow Jones spokeswoman.
When the back up system was activated around 3:00pm, the delay was eliminated and the numbers on the big board caught up immediately with market activity.
"The drop lag that occurred in a minute should should have happened over a period of 20, 30 or 40 minutes," the spokeswoman said.
CNN Money (http://money.cnn.com/2007/02/27/markets/dow_drop/index.htm)
Maybe I'm wrong here, but if this ' technicle glitch' was that sell orders weren't getting processed while that would make a drop steeper once the sell orders did go through, wouldn't also that tend to minimize the total daily drop in stock prices, since people didn't realize that others were selling, hence less panic-driven sales?
I mean, from what I've read, they haven't alleged that the 'glitch' created sales transactions out of thin air -- it just backed them up for awhile, making the market appear more stable than it actually was at that hour. Thus, fewer people were motivated to sell than perhaps would have been if the market had more gradually descended to the level it finally did by the end of the day.