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U.S. stocks closed higher Thursday even after a technical glitch at the
Nasdaq OMX caused a trading halt in all Nasdaq-listed stocks and options
for more than three hours.
The Nasdaq is home to more than 2,700 stocks, particularly technology
giants such as Apple (AAPL, Fortune 500), Google (GOOG, Fortune 500) and
Microsoft (MSFT, Fortune 500). Trading at the exchange was halted around
12:14 p.m. ET due to issues with "quote dissemination." Options trading was
also halted, and the New York Stock Exchange and the BATS exchange had also
halted all Nasdaq securities.
Nasdaq resumed trading first in shares of Atlantic America (AAME)at 3 p.m
ET, following a 15-minute quote only period. All other securities began
trading at 3:25 p.m. ET, also following a 15-minute quote only period. The
quote only period, which is typically used during initial public offerings,
allowed the Nasdaq to accept buy and sell orders, and investors were also
able to cancel orders during the period.
When trading resumed, stocks picked up where they left off around the
midday stoppage. The Dow Jones industrial average broke a six-day losing
streak while the S&P 500 climbed nearly 1%. The Nasdaq advanced more than
1%.
But there was one notable exception. Shares of Nasdaq OMX (NDAQ)dropped
3.4%. Before the halt, the exchange's stock was up nearly 1%.
SEC spokesman John Nester said the agency is "monitoring the situation" and
that it is "in close contact with the exchanges."
The trading glitch could be another blow to investor confidence, which has
been rattled over the years by the Flash Crash in 2010, Facebook's botched
IPO, and more recently, a fat finger trade affecting China's stock market.
"We know machines run the show, but we're beginning to see glitches more
and more frequently," said Ryan Detrick, senior technical strategist at
Schaeffer's Investment Research. "That doesn't help overall confidence
among investors."
Broader market: Despite troubles at the Nasdaq, the broader stock market
rallied as positive economic data from both China and Europe gave investors
some optimism. European markets moved solidly higher, while Asian markets
ended mixed.
A survey of European purchasing managers pointed to signs that the economy
may be stabilizing there. Better-than-expected data from Chinese factories
gave glimmers of hope for Asia and the broader global economy.
Emerging markets break losing streak too. Indian markets also jumped higher
after four consecutive trading days of steep losses. The Mumbai Sensex
popped up by nearly 2%. Markets have fallen by 11% over the past month due
to concerns about a flagging economy, political gridlock and an outflow of
foreign investment money.
Related: Fear & Greed Index is showing Fear
A retail rout: Looking at individual stocks on the move, several retailers
plunged Thursday following weak quarterly numbers.
Abercrombie & Fitch (ANF) shares plummeted after the teen-oriented clothing
retailer reported a slump in quarterly sales and profits and a terrible
outlook.
Traders on StockTwits are worried. American Eagle Outfitters (AEO) also had
a lousy earnings report this week. Aeropostale (ARO) shares tumbled in
after-hours trading after the teen retailer also posted weak results.
GameStop (GME, Fortune 500) bucked the trend in retail. The video game
seller's stock soared on better-than-expected earnings and strong guidance
around the promise of new gaming consoles. Traders made light of how the
stock, which has been a popular target of short sellers, continues to go
higher despite many bears trying to talk it down.
In the world of tech, Hewlett-Packard (HPQ, Fortune 500) shares dropped
after the company announced its latest earnings on Wednesday, showing that
PC sales are still in the dumps. HP is still the top stock in the Dow this
year though, as investors have high hopes for the turnaround plan of CEO
Meg Whitman.
After the closing bell, Gap (GPS, Fortune 500) reported
better-than-expected revenue and lifted its outlook, sending shares higher
in after-hours trading.
Pandora (P) also reported upbeat earnings, but the stock tumbled in
after-hours trading after the online radio company issued
weaker-than-expected guidance. (Embedded image moved to file: pic30188.gif)
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Stocks higher after Nasdaq's 3-hour halt 23/08
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