[Infowarrior] - UPDATE 2-NYSE says experienced trading delays

[Richard Forno]

UPDATE 2-NYSE says experienced trading delays
Tue Feb 27, 2007 7:59 PM ET

(Rewrites throughout, adds brokerage delays, byline)
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.
com:20070228:MTFH99773_2007-02-28_00-59-04_N27240624&type=comktNews&rpc=44

By Jonathan Keehner

NEW YORK, Feb 27 (Reuters) - The New York Stock Exchange's touted trading
floor automation was tested by its first big selloff on Tuesday, and didn't
pass with flying colors.

The Big Board was not the only financial company to see its systems taxed by
tumbling equity markets and soaring volumes.

But the admission of a glitch may be a sign that its hybrid system, which
has coincided with the loss of hundreds of flesh-and-blood floor trading
jobs, still needs to work out some kinks.

"Toward the end of trading today, we experienced intermittent delays and we
are assessing the situation," said NYSE Group <NYX.N> spokesman Eric Ryan.

The delays occurred toward the end of Tuesday's big stock sell-off, which
resulted in heavy volume on the NYSE where about 2.41 billion shares changed
hands -- well above last year's estimated daily average of 1.84 billion.

The glitch could be an indication that NYSE's hybrid market, which
integrates floor-based trading with automated capabilities, was unable to
handle such large volume, analysts said. Last month, the NYSE requested a
delay in upcoming regulatory deadlines, citing delays in rolling out the
hybrid market.

TRADES SNAGGED ON MANY VENUES

While the S&P 500 experienced its biggest one-day drop in almost four years,
orders were snagged on venues ranging from the Big Board, which is the
largest U.S. stock exchange, to discount brokers catering to mom-and-pop
retail investors.

The Web sites of several full service and online brokerages were
significantly delayed, said Matt Poepsel of Lexington, MA-based consultant
Gomez, Inc.

Response times for online brokers at Banc of America Investment Services,
Inc., a unit of Bank of America <BAC.N>, The Vanguard Group, and Fidelity
were all at least four times slower for the final trading hour on Tuesday
than during that period the day prior, according to Gomez.

A Fidelity spokesman was not immediately available and Bank of America
declined to comment, but a Vanguard spokeswoman confirmed that trades were
"slightly slower than normal."

A technical glitch also hit the system that calculates the Dow Jones
industrial average <.DJI> on Tuesday, but it did not affect stock prices, a
spokeswoman for Dow Jones Indexes said.

With an hour left to trade, the Dow Jones industrial average fell more than
500 points as it abruptly added about 200 points to its slide in late
afternoon trade.

The combination of glitches and delays may have further complicated a major
sell-off in U.S. equity markets on Tuesday, as a plunge in China's equity
market fanned worries that stock valuations there are too high and some data
indicated U.S. economic growth may slow.

(Additional reporting by Ellis Mnyandu and Jonathan Stempel)