View Full Version : NYSE, Nasdaq halt bickering, pledge co-operation

9th May 2010, 01:18 PM
(Reuters) - The two largest U.S. stock exchange operators, NYSE Euronext and Nasdaq OMX Group, called a truce and issued a joint statement on Sunday, pledging to co-operate with each other and regulators to get to the bottom of last week's dramatic stock market plunge.

On Thursday, the Dow Jones Industrial Average suffered a thus far unexplained intraday drop of nearly 1,000 points, its largest intraday decline, before paring much of that loss.

The Dow nonetheless fell about 3 percent on Thursday and continued to drop on Friday, shedding another 1.3 percent as investors remained skittish about Europe's debt crisis and how much further the U.S. stock market indices could decline.

On Friday, the chief executives of both exchange operators took to CNBC-TV's airwaves to snipe at each other.

Nasdaq OMX's Robert Greifeld faulted the New York Stock Exchange's use of a "mini circuit breaker" during the plunge, saying it was akin to walking away from its listed stocks and sending a signal that there was something wrong with NYSE-listed stocks.

NYSE Euronext's Duncan Niederauer retorted, saying that the NYSE's mechanisms slow down "the race car when we think it's dangerous."

But by Sunday afternoon, the exchanges had changed their tunes. Of their own accord, a joint statement was issued, apparently in the belief that the markets were looking for some form of united front from the exchanges.

"The NASDAQ OMX Group and NYSE Euronext are committed to working closely with each other, the (U.S.) Securities and Exchange Commission, other regulators and all market participants to determine the cause of Thursday's market plunge and to develop effective solutions promoting greater market stability, efficiency and transparency," the exchanges said.

The two exchanges have fought bitterly for years and that rivalry has intensified as more trading has gone electronic.

They have also had to contend with two relative newcomers, BATS and Direct Edge, which each account for some 10 percent of U.S. equities trading volume and have eaten into their larger rivals' market shares in recent years.

Nasdaq and NYSE also compete fiercely over listings, trying to poach top name listings from one another and win the largest number of new IPOs and the biggest names.


The market swoon on Thursday prompted U.S. exchanges to cancel trades that occurred on hundreds of stocks during that time.

Nasdaq on Sunday said it was adding 12 stocks to the list of trades it was canceling.

All but one of the stocks Nasdaq added are listed on an exchange operated by NYSE Euronext and include exchange-traded funds, many of which list on NYSE Euronext's all-electronic Arca exchange or its Amex venue.

The additions include the index-based IQ Hedge Macro Strategy Tracker ETF and WisdomTree LargeCap Growth Fund, which are both listed on Arca, and the PowerShares S&P SmallCap Utilities Portfolio which lists on Nasdaq.

Nasdaq is canceling all trades made between 2:40 p.m. EDT and 3 p.m. EDT on Thursday that deviated more or less than 60 percent away from the consolidated last print in that security at 2:40 p.m. or just before. Nasdaq said last week its decision cannot be appealed.

An updated list of stocks affected by the cancellations released by Nasdaq on Sunday included 236 stocks. The entire list is at: here

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