Fergie's Tech Blog

Inside Wall Street's Computer Meltdown

Brian Braiker writes on Newsweek.com:

Were the computer glitches that exacerbated the downward trajectory of the market Tuesday illustrative of the dark side—the Achilles heel—of the markets' move toward more electronic trading? Or were they bumps along the learning curve—"growing pains," as one trader described them—that will ultimately lead to smoother trading?

"On Tuesday at around 2 p.m., the market's extraordinarily heavy trading volume caused a delay in our trading system," explains a spokesperson for Dow Jones & Co., the media company that manages the index of 30 blue-chip stocks. For 70 minutes, a slow data feed to the Dow Jones industrial average (DJIA) calculator meant that traders were working off a slightly outdated set of numbers.

When the error was caught, the system was switched to a backup server that immediately readjusted the figures—sending numbers across the board into a free-fall plunge of 178 points in a single minute.

posted by Fergie @ 3/02/2007 02:47:00 PM