New York Stock Exchange glitch briefly sends shares 99% lower

Berkshire Hathaway and Barrick Gold had their stocks drop 99.97% and 98.54% respectively due to a glitch in the New York Stock Exchange (NYSE).

These massive swings triggered a trading halt in dozens of companies on Monday(3 June) before the issue was resolved, says Al Jazeera. 

Intercontinental Exchange, the owners of the NYSE, said the technical issue was resolved and trading could continue as normal.

It was the second stock market hiccup in less than a week after a glitch last Thursday affected the dissemination of real-time data for the S&P 500 and Dow Jones indexes for over an hour.

The NYSE said in a statement that it and other exchanges were cancelling all erroneous trades in Berkshire Hathaway's class A shares related to the glitch from 09:50-9:51 ET, at or below $603,718.30 per share.

The NYSE also said it was cancelling erroneous trades in Nuscale Power, Barrick Gold, Chipotle Mexican Grill and other stocks that were impacted by a technical glitch. Overall, it was reviewing trades in about 40 securities.

Berkshire Hathaway and Barrick Gold at one point were shown to be down 99.97% and 98.54%, respectively, due to the technical issue, before those trades were corrected.

After trading resumed, Berkshire Hathaway closed 0.6% higher at $631,110.10, and Barrick Gold climbed nearly 2% to $17.42.

The S&P 500 ended the day up 0.1%.

The Consolidated Tape Association (CTA), responsible for disseminating real-time trade data on stock exchanges, said Monday's problem was related to a new software release at one of its data centres.

The CTA said it resolved the issue by switching to a secondary data centre running the previous version of the software.

Some of the stocks halted on the NYSE showed unusual outsized movements.

Berkshire, Barrick Gold and Chipotle did not respond to requests for comment about Monday's technical problem.

The NYSE and the CTA said the problem was related to limit up-limit down bands meant to prevent extraordinary market volatility and extreme price movements in individual stocks by preventing trades outside of specific price ranges.

The price band for each security is set at a percentage level above and below its average price in the preceding five minutes.

The bands were developed as part of the response by financial regulators and exchanges to the "flash crash" of 2010, which briefly wiped out nearly $1 trillion in market capitalization in a few minutes.

On May 6, 2010 when equities were recovering from the financial crisis and in the early stages of what would become a near 11-year bull market, the Dow Jones Industrial Average tumbled almost 700 points in minutes.

Exchange outages, caused by software and hardware glitches, cyberattacks, and even hungry squirrels, have roiled markets and shaken investor confidence for decades, as trading has moved from the floors and pits of bourses to electronic systems that match trades at nearly the speed of light.

In February 2023, the NYSE said it would reimburse investors for losses due to a glitch that caused widespread confusion and resulted in thousands of trades being nullified.

The NYSE did not respond to a request for comment about whether it would reimburse investors potentially affected by Monday's issue.