Stock ‘tape’ glitch means it’s still not exactly clear where the Dow, S&P 500 closed on Monday

Trader Talk

Traders work on the floor at the New York Stock Exchange.

Brendan McDermid | Reuters

A trade organization that oversees the dissemination of trades at the NYSE said Monday’s trading glitch was due to a “network component failure” at the the exchange’s data center in Mahwah, New Jersey.

The Consolidated Tape Association (CTA) said the system had been replaced and that all systems were operating normally this morning.

Still, the trading glitch caused considerable confusion in the last hour, and cast doubt on whether the prices disseminated for major indexes like the Dow Jones Industrial Average and the S&P 500 were accurate.

What happened? There is a “river” of trades that are reported each day from the exchanges. One “stream” comes from the stocks that are listed on the NYSE (called “Tape A”) another from stocks listed on NYSE American and regional stock exchanges (called “Tape B”) and a third from stocks listed on the NASDAQ (“Tape C”). These “streams” all are mixed together as one “river” of quotes that are listed on a single tape, called the Securities Information Processor (SIP).

In the last hour of trading, there was an issue reporting some trades that had already been made to the tape. The trades happened, but there was an issue getting them reported to the tape. This was not finally resolved until after 8 PM ET.

Since the prices for indexes like the S&P 500 and the Dow Jones Industrial Avenue are calculated off the tape, and since not all the final prices necessarily made it onto the tape by the close at 4 PM ET, it wasn’t clear if the prices reported for the indexes at the close were correct.

The S&P price shortly after the close at 4 p.m. ET was 2882.69. This morning, it was posted at 2883.09, implying there was a small re-calculation.

It’s not clear if this will be the final calculation. Howard Silverblatt, Senior Index Analyst, S&P Dow Jones Indices, said “We are continuing to review the numbers and calculations.”

What happened? CTA sad that the “network component” that failed was replaced, implying that this was likely a hardware problem.

CTA said there was no reason to believe that any systems operated by the exchanges contributed to the outage. NYSE is heavily involved in upgrading its software system to a new trading platform called Pillar, and this statement seemed to preclude that this was an issue in the outage.

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