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Technical Malfunction Halts Trading on New York Stock Exchange

Aired June 8, 2001 - 10:18   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DONNA KELLEY, CNN ANCHOR: Usually it's pretty wild on Friday at the New York Stock Exchange.

LEON HARRIS, CNN ANCHOR: Not this morning.

KELLEY: Not for the moment.

HARRIS: Well, it's wild but for a different reason.

KELLEY: Yeah.

HARRIS: Let's check in with Christine Romans and find out what's going on up there.

CHRISTINE ROMANS, CNN CORRESPONDENT: Yeah, a little hairy. Stocks were lower in the early going but now here at the New York Stock Exchange the trading computers are having some trouble updating and the NYSE confirming systems problems. Originally it was affecting half of the shares traded here. Now, after some very low trading volume, trading has been halted on all NYSE stocks. So at 11:15 they're going to try to reopen those. So we've got people milling about on the trading floor here waiting, I guess, for another hour or so to see how that's going to shape up.

The Nasdaq Composite, though, we're watching that move. For more on the trading action there at the Nasdaq market site, let's go to Sasha Salama -- hi, Sasha.

SASHA SALAMA, CNN CORRESPONDENT: Hi, Christine.

All systems are go here at the Nasdaq and they're down. Stocks down across-the-board. All sectors are lower and there are a few reasons for that. First of all, we have Intel. It's turned down after being higher earlier. After the close yesterday, the world's biggest maker of computer chips gave its mid-quarter update and basically reassured Wall Street that what it had predicted for the second quarter and the full year remains on track. The only weakness it saw that was a surprise was demand for chips that go into PCs and wireless devices that are known as communications chips.

We're also watching Juniper Networks, NPR the ticker of this company which makes computer networking equipment. This company said that Q2 results both for earnings and revenues would fall way short, the company cutting eight to nine percent of its work force. And also, Apple Computer down nearly four percent. Merrill Lynch says guess what? We don't see any turnaround in demand for PCs any time soon. Merrill cutting numbers on Apple -- Christine?

ROMANS: OK, thank you, Sasha.

A new deal that would create the country's second largest Internet service provider. Juno Online and Net Zero are merging in a $70 million stock swap. That new company, to be called United Online, would beat out EarthLink for the No. 2 spot but will still trail America Online, which has 29 million users. Of course, AOL and this company are both owned by AOL Time Warner.

That's the latest from Wall Street for now -- Leon, Donna, back to you guys.

HARRIS: And Christine, I don't want to stir up the chuff here, but I have to ask you this one. Has this ever happened before, and if so, I mean what's the likely effect of this stoppage?

ROMANS: Well, that's interesting. It's very rare to have in trading stocks here. I mean when there are hurricanes and there are snowstorms, when there are any kind of, all manner of disasters and bad weather, traders still come to work, they still open this exchange and this index is pretty reliable. So this is really, really unusual. We're still waiting to hear from the chairman of the New York Stock Exchange, Dick Grasso, about what caused this and, you know, what they're going to do to prevent it again in the future.

But, indeed, a lot of traders on the floor were very, very surprised this morning when eight posts did not open, six or eight or even 11 Dow components at one time not trading. So it's a little hard to get a read on what's happening in the markets and this is, of course, you know, supposed to be the engine of the world economy.

HARRIS: But does this mean people lose money or what?

ROMANS: Well, who knows? I mean think about all the orders that have been placed that haven't been able to be enacted. You call your broker and you put in an order but those stocks haven't opened. It's interesting, you know, there's a backlog of requests for what to do, to buy or sell. So I would imagine the lines to your broker are pretty busy right about now.

HARRIS: Yeah, I would bet. No doubt. All right, Christine.

KELLEY: Thanks.

HARRIS: Well, go get some coffee or something and hang out for a while.

ROMANS: All right, I will.

HARRIS: We'll check back with you later on. Boy.

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