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A “Squirrel “market? A short history of weird stock market glitches

On August 2nd, 1994 a squirrel chewed into a power line in Trumbull, Connecticut, where the Nasdaq's computer center is located, shutting down trading for 34 minutes. It was the second time it had happened.
On August 2nd, 1994 a squirrel chewed into a power line in Trumbull, Connecticut, where the Nasdaq's computer center is located, shutting down trading for 34 minutes. It was the second time it had happened.
On August 2nd, 1994 a squirrel chewed into a power line in Trumbull, Connecticut, where the Nasdaq’s computer center is located, shutting down trading for 34 minutes. It was the second time it had happened.

An “undisclosed technical glitch” shut down trading on more than 2000 issuers on the Nasdaq today, including heavyweights such as Google, Microsoft and Cisco. This was a little odd, but nothing compared to some of the stock market glitches that have wreaked havoc on investors over the years.

Stock market glitches in computer algorithms have led to so called flash crashes in recent years, but this was a big one: you have to go all the way back to the 90’s for a time when the Nasdaq was down for this long.

On August 2nd, 1994 a squirrel chewed into a power line in Trumbull, Connecticut, where the Nasdaq’s computer center is located, shutting down trading for 34 minutes.

Here’s the thing; this was actually the second time it happened. On December 10th, 1987 another stray squirrel shut down trading for 87 minutes.

A report from the New York Times on that day got to the bottom of the story.

“An adventurous squirrel touched off a power failure in Trumbull, Conn., that shut down the National Association of Securities Dealers’ automatic quotation service for 82 minutes yesterday. A Nasdaq official estimated that the power failure might have kept slightly more than 20 million shares from being traded. Since the stock market collapse in October, daily volume on the over-the-counter market has averaged about 130 million shares, the paper said. Before Oct. 19, volume was almost 150 million shares a day.”

The bad news? Both squirrels died. The good news? Power in Trumbull was restored promptly. Oh, and the Nasdaq proceeded to go on the largest bull run in history following the famed crash of 1987. So, you know: Good Squirrel…

Facebook IPO stock market glitch

There have been times when the markets have shut down over a single issuer or participant. One notable time was when the market shut down because of Facebook’s debut. The social media giant was the biggest IPO ever for the Nasdaq, and it proved too much. More than 30,000 orders were botched and the exchange had to later pay the SEC a huge fine.

The time one guy caused a “Flash Crash”

A “Flash Crash” that happened on May 6, 2010 basically turned out to be the fault of a single person: Navinder Singh Sarao was later charged for “spoofing” trades that made him $40-million illegally. On the date in question he single-handedly caused the Dow to fall 600 points, all while making a cool $900,000. Fortunately, the markets recovered almost instantly.

A 75-year long stock market glitch

Of course, nothing can compare the bizarre history of the Russian stock market, which was born in 1810 and shut down after the 1917 revolution. Call it a stock market glitch, call it a cultural revolution, but the country’s stock market did not open again until January, 1992That’s a whopping 75 years! 

Will the Nasdaq once again find that its “undisclosed technical glitch” is, in fact, another adventurous squirrel? If history is to be our guide, we can only hope.

 

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About The Author /

Nick Waddell
Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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