Trading on the New York Stock Exchanged resumed Wednesday after being halted for about four hours due to “unknown internal technical reasons.” Internal technical issues are being cited for the reason why NYSE shut down trading at 11:32am EST, which also shut down trading on the NYSE MKT exchange, a market where small companies are traded.
In August 2013 a “Flash Freeze” shut the Nasdaq down for hours, as a “problem with NYSE systems” was blamed. Today’s is but the fourth trading halt at the NYSE due to technical problems in 15 years. Stock trading did not cease completely, as NYSE-listed stocks were still being traded on 11 other exchanges, like the Nasdaq.
“We’re currently experiencing a technical issue that we’re working to resolve as quickly as possible. We will be providing further updates as soon as we can, and are doing our utmost to produce a swift resolution, communicate thoroughly and transparently, and ensure a timely and orderly market re-open,” NYSE said in a statement. Interestingly, on the same day, United Airlines flights were grounded for two hours due to a technical glitch, and The Wall Street Journal’s website also stopped working after the NYSE stopped trading.
While the NYSE suffered what is being called a technical glitch, Chinese stocks continue to tumble into Wednesday. The China Securities Regulatory Commission stated that major shareholders and senior executives should buy their companies’ shares when price slump. “Investors’ panic and irrational sell-off caused a liquidity strain on the stock market,” CSRC spokesman Deng Ge said.
Within minutes, the Shanghai composite was down 8%, and experts say that equities are likely to fall further, considering the Shanghai composite index increased over 150% and Shenzhen’s index tripled in just one year. The China Securities Regulatory Commission dictated that shareholders, executives, and managers with more than 5% of any company’s shares would not be able to sell any holdings until the end of the year. The commission stated that the order was made to “maintain stability of the capital market and protect the legal rights and interests of investors.”
Starting June 12, stocks on the Shanghai composite fell over 32%. In that period, over $3 trillion in wealth has been lost by investors, more than eight times Greece’s total debt load. In 2007, amid global financial crisis, Chinese stocks lost more than 70% of their value.
“There are a lot of affluent middle-class investors that are ultimately going to be on the losing end of this market correction — that’s an unfortunate reality,” he remarked. “It will have some impact on household wealth.”
“The big question politically is what does this mean for [financial] reform,” he added. “People believe the administration of president Xi Jinping is moving toward financial reform, and I still believe they are trying to find ways to move forward.”
Greece has until the end of business on Thursday to draft a bailout proposal to prevent an exit from the eurozone. Some believe that a “Grexit” would be the next step. Prime Minister Alexis Tsipras and finance ministry officials are trying to come to terms. European Central Bank ($89 billion euros) governing council member said on French radio: “There must be an agreement next Sunday [July 12] at the very latest,” he said. “After that it will be too late and the consequences will be grave. I fear that if there is no agreement on Sunday the Greek economy will collapse and there will be chaos.” Capital controls have been imposed on Greece to restrict cash withdrawals to 60 euros per day through Monday.