Glitch Halts Trading On NYSE

Equipment problems brought trading to a halt for about an hour Monday afternoon on the New York Stock Exchange, the nation's biggest stock market.

Traders said the exchange began having equipment problems about 12:35 p.m. and the NYSE was forced to halt all trading about 40 minutes later, at 1:16 p.m. ET. Trading resumed about 2:15 p.m.

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The NYSE said in a statement that trading was halted because of "a systems communication problem." NYSE officials did not immediately return telephone calls for more details.

However, a NYSE spokesperson told CBS News that a "hardware" problem caused the glitch.

Traders said the exchange officials had told them initially they expected the outage to last for 15 to 20 minutes.

As trading stopped, the Dow Jones industrial average was up 41.20 at 8,493.49. When trading resumed the Dow continued its advance, but then gave up ground. Shortly before 3 p.m. the Dow was up 13.91 at 8,466.20.

It is the first time in recent memory that trading was halted because of equipment failure on the exchange, which has spent more than $1 billion in the last 10 years upgrading technology.

The outage didn't completely prevent investors from buying and selling NYSE-listed stocks. Trading continued on smaller regional stock exchanges and electronic networks such as the Nasdaq stock market.

But the loss of the trading on the NYSE made it a little more difficult for trading firms to bring buyers and sellers together, possibly reducing liquidity in the market.

"They couldn't get the flow of the exchange," said Dan Marciano, a stock trader with First Albany Corp. "The liquidity isn't there. It certainly slows the pace down."

Traders said the problems initially began with the exchange being unable to post trading and pricing information. That could have resulted in some investors making trades based on outdated information.

The last time trading was halted on the NYSE was on Dec. 18, 1995, when the opening bell was delayed for an hour. Monday's trading halt was the firs after markets had opened.