The Trading Halt Heard Round the Industry

As technological problems forced the New York Stock Exchange to grind to a halt Wednesday, financial services insiders and observers weighed in on the vulnerabilities of increasingly electronic financial systems.

It’s been a big day for glitches.

The New York Stock Exchange suspended trading Wednesday morning, citing a “technical issue.” Earlier, United Airlines had grounded flights for two hours because of a “network connectivity issue” on its passenger reservations system. Meanwhile, the Wall Street Journal‘shomepage temporarily went dark, displaying a 504 error message to some visitors.

There’s no indication thus far that the outages were related, and company representatives and federal officials have said that the problems are rooted in internal technological issues. (Read: no hackers here.) But the trio of snags ignited plenty of debate on the Internet as journalists and industry insiders tried to pin down the source of the problems-and what the NYSE trading freeze in particular reveals about systemic vulnerabilities in the digital age.

JPMorgan Chase and U.S. Bancorp reported no unusual activity, while several other of the largest commercial banks did not respond to calls and emails from American Banker. All bank websites seemed to be up and running.

The NYSE was in shutdown mode for nearly four hours Wednesday, reopening shortly after 3 p.m.:

The exchange was forced to manually cancel roughly 700,000 orders at the outset of the shutdown, according to trader Peter Costa in the New York Times.

NYSE declared in a Twitter post that the outage was not the result of a cyberattack:

The Department of Homeland Security also assured CNN that the NYSE and United malfunctions had “no sign of malicious activity”:

The Department of Homeland Security told CNN that there is “no sign of malicious activity” at the NYSE or with an earlier outage experienced by United Airlines. The FBI says it reached out to NYSE and “no further law enforcement action is needed at this time.”

During a briefing, Josh Earnest, the White House press secretary, fielded questions about the problems at United, NYSE and the Journal between questions about the future of Greece and Bill Cosby’s Presidential Medal of Freedom. Earnest said there was no indication that there were “malicious actors” tied to United or the stock exchange, nor were there any indications that the events were related.

Eric Scott Hunsader, head of the market data company Nanex, told Fortune that the NYSE trading freeze was caused by a systems upgrade gone wrong:

But Eric Scott Hunsader, an expert in Wall Street trading systems who heads market data firm Nanex, said that it appears that a faulty system upgrade brought trading on the exchange to a halt. The NYSE has reportedly also told floor traders the exchange had to suspend trading due to an error with a systems upgrade that was rolled out before the market opened on Wednesday.

The Financial Times‘ Megan Murphy questioned whether internal issues are really preferable to hackers:

Commenters responded that the NYSE had ulterior motives to dispel speculation of a breach:

Of course, such chatter can be tough to contain. Cybersecurity blogger Brian Krebs noted an interesting dispatch from hacktivist group Anonymous, although his followers were quick to point out that the message could have been referring to the effects of turmoil in the Chinese markets and in Greece:

Meanwhile, traders standing outside the NYSE building on Wall Street were taking the day’s events in stride, according to American Banker reporter Tanaya Macheel:

One trader told Macheel that these kinds of outages will only become more common as the industry’s dependence on technology grows:

All this time, securities were trading smoothly on the Nasdaq-and the NYSE rival made sure the world knew about it:

Nasdaq’s not-so-subtle shade-throwing amused the New York Times‘ Neil Irwin:

But MarketWatch columnist David Weidner warned that the NYSE glitch should be taken seriously, since it suggests that our financial marketplaces aren’t as reliable as they should be:

Even if the NYSE is not the victim of cyber terrorism and is simply experiencing a regular technical glitch, if the exchange was forced to hit the “off” switch, it signals a vulnerability of a market that is almost entirely electronic and highly technical.

During the White House briefing, press secretary Earnest was also asked if the issues could make cybersecurity a higher priority for the Obama administration.

“This is a top policy priority even when it isn’t in the news,” Earnest said.

Tanaya Macheel contributed to this article.