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Nasdaq halted all trading for 3 hours yesterday

130822163413-nasdaq-trading-halt-620xaBy Hibah Yousuf

U.S. stocks closed higher Thursday even after a technical glitch at the Nasdaq OMX caused a trading halt in all Nasdaq-listed stocks and options for more than three hours.

The Nasdaq is home to more than 2,700 stocks, particularly technology giants such as Apple, Google and Microsoft. Trading at the exchange was halted around 12:14 p.m. ET due to issues with “quote dissemination.” Options trading was also halted, and the New York Stock Exchange and the BATS exchange had also halted all Nasdaq securities.

Nasdaq resumed trading first in shares of Atlantic America at 3 p.m ET, following a 15-minute quote only period. All other securities began trading at 3:25 p.m. ET, also following a 15-minute quote only period. The quote only period, which is typically used during initial public offerings, allowed the Nasdaq to accept buy and sell orders, and investors were also able to cancel orders during the period.

When trading resumed, stocks picked up where they left off around the midday stoppage. The Dow Jones industrial average broke a six-day losing streak while the S&P 500 climbed nearly 1%. The Nasdaq advanced more than 1%.

But there was one notable exception. Shares of Nasdaq OMX dropped 3.4%. Before the halt, the exchange’s stock was up nearly 1%. SEC spokesman John Nester said the agency is “monitoring the situation” and that it is “in close contact with the exchanges.”

The trading glitch could be another blow to investor confidence, which has been rattled over the years by the Flash Crash in 2010, Facebook’s botched IPO, and more recently, a fat finger trade affecting China’s stock market.

“We know machines run the show, but we’re beginning to see glitches more and more frequently,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research. “That doesn’t help overall confidence among investors.”

Despite troubles at the Nasdaq, the broader stock market rallied as positive economic data from both China and Europe gave investors some optimism. European markets moved solidly higher, while Asian markets ended mixed.

A survey of European purchasing managers pointed to signs that the economy may be stabilizing there. Better-than-expected data from Chinese factories gave glimmers of hope for Asia and the broader global economy.

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