Computers at the
The world's stock markets handle billions of transactions every single day, but this past week's computer problems at two major global exchanges highlights the fact that while computers are faster and more accurate than human traders, even electronic systems aren't foolproof, a sobering thought when trillions of dollars are involved.
The Nasdaq's computer errors resulted in numerous Web sites and online brokers displaying incorrect price shifts on NYSE-listed stocks. While the prices themselves were correct, the magnitude of price movements were not, resulting in some stocks appearing to be up, when they were actually down, and vice versa.
While sites such as Yahoo and Google said Friday they did not register significant complaints from their users, the potential for an investor to make decisions using erroneous data remained. Nasdaq spokeswoman Bethany Sherman said the computer error that caused the problem was fixed.
In the second day of a two-day sell-off, with
That left investors who wanted to buy or sell stocks, hoping to either limit their losses or pick up bargains, without the ability to trade at all. Those are the kinds of situations that can bring about a panic, experts said.
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