It's not unprecedented for the New York Stock Exchange to shut down. In its 223-year history, the index has had more than 400 "special closings."
But Wednesday's unexpected three-hour closing came without warning. It left investors confused -- even panicked -- and asking the question, "Why did the NYSE shut down today?"
You see, the NYSE "temporarily halted" trading at 11:32 a.m. ET. It resumed at roughly 3:10 p.m. ET.
About an hour before trading was halted, the NYSE reported it had a technical issue that had been resolved.
But then the market began to shut down. The NYSE's share of all trading volume on U.S. markets dropped to 7.4% a little before 11 a.m. ET (compared to a typical roughly 10%). The drop was pretty quick from there. By 11 a.m., it fell to 4.8%, and by 11:20 a.m., to 2.6%. Trading halted at 11:32 and 57 seconds.
Here's what happened...
A "technical issue" is why the NYSE shut down today, according to index representatives.
The timeline is as follows...
In a brief statement immediately following the halt, the NYSE wrote in a statement, "NYSE/NYSE MKT has temporarily suspended trading in all symbols. Additional information will follow as soon as possible."
Then just after noon, NYSE spokeswoman Marissa Arnold wrote in an emailed statement, "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."
At 12:09, NYSE tweeted about "a technical issue."
Then at 12:28 p.m., the exchange elaborated and dispelled rumors of a cyberattack.
Also around 12:30 p.m., U.S. Securities and Exchange Commission (SEC) Chairwoman Mary Joe White issued a statement, "We are in contact with NYSE and are closely monitoring the situation and trading in NYSE-listed stocks. While NYSE is working to resolve the situation, NYSE and NYSE MKT stocks continue to trade normally through other trading venues."
The White House said President Obama had been briefed on the trading halt and that the Treasury Department would be monitoring the situation.
At 3:10 p.m., the NYSE reopened and tweeted:
Here's what the shutdown did to markets - plus other strange occurrences on Wednesday...
Before the halt, the Dow Jones Industrial Average and the broader S&P 500 were down. Volumes were extremely low after trading restarted.
The Chicago Board Options Exchange Volatility Index (VIX), a "fear gauge" that measures market volatility, jumped after trading was suspended. The index rose from around 18.11 immediately after the halt to trade as high as 19.10. By market close, it finished at 19.66, for a daily rise of 22%.
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The DJIA finished down 261 points (1.47%). The S&P and Nasdaq both fell 1.67% and 1.75% respectively.
Besides being rattled by the NYSE shutdown, domestic investors - many who sat out the final hour of buying and selling - were already on edge over concerns regarding Greek and Puerto Rican debt and the ongoing freefall in the Chinese stock markets.
There was no interruption at the dozens of other U.S. stock exchanges Wednesday, including the Nasdaq, so investors were still able to buy and sell stocks easily.
Coincidentally, the New York Stock Exchange wasn't the only institution to experience a technical glitch on Wednesday. Break out the tin foil hat...
United Airlines temporarily grounded all flights for several hours the same morning. It blamed "connectivity issues." Additionally, The Wall Street Journal's site unexpectedly shut down for a time.
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