NASDAQ reopens after trading freeze

The NASDAQ stock exchange reopened Thursday afternoon after all trading was halted for roughly three hours due to technical errors.

The nation’s second-largest exchange told traders early Thursday afternoon that it was freezing activity “until further notice.” The stock exchange said it was dealing with a problem in the data feed that provides stock quotes.

When the exchange reopened around 3:30 p.m., stocks immediately traded slightly higher.

Washington officials had little role to play in the outage but were kept aware of the situation. President Obama was briefed on the matter by White House chief of staff Denis McDonough, according to a pool report. Treasury Secretary Jack Lew was also briefed, according to a Treasury official.

A spokesman for the Securities and Exchange Commission (SEC) said the agency was “monitoring the situation” and staying “in close contact with the exchanges.”

The apparent technical glitch brought trading of the some of the nation’s most high-profile stocks — including Apple, Netflix and Microsoft — to a screeching halt.

In a statement, NASDAQ said it temporarily halted trading after discovering a problem with a processor that distributes stock prices for the whole industry, and that those issues were fixed within half an hour. The exchange added that it worked closely with other exchanges, buyers and regulators to make sure that selling reopened without a hitch.

Looking forward, the exchange said it would work “to investigate the issues of today, and we will support any necessary steps to enhance the platform.”

The outage also is another high-profile misstep for the exchange in recent months.

NASDAQ paid the SEC $10 million in May to settle charges it botched the high-profile initial public offering of Facebook stock, the largest fine ever paid by a stock exchange to the watchdog.

The SEC charged that the “ill-fated decisions” at NASDAQ during the Facebook offering last spring led to securities law violations. The exchange struggled to process orders during the frantic first minutes of trading in Facebook stock.

As part of the settlement, NASDAQ agreed to compensate investors who were unable to complete trades during that time and issued an apology.

Banking panels in the House and Senate both looked into the Facebook matter, but no formal investigations materialized.

Bernie Becker contributed.

— This story was first published at 1:32 p.m. and has been updated.