go to bloomberg.com. pimm: will, of course. -- well, of course. will they be doing with backlog issues when they get this going again, or executing orders? matt: i suspect they will be dealing with a lot of backlog. beginningrokers will calls from clients to make moves, plus the orders they already had to put through that they had not been able to or that had been sent back to them. they will be out there and kind of flood the system. those traders on the floor can handle it just fine. they can handle a hell of a lot have in thew and past on average in the last couple of years. is what is causing the issue. if it is a technical it -- glitch, -- mputer

pimm: it is 28 minutes long. the last trade was suspended at 1132 a.m. this morning. we have been down for the last 28 minutes as we come up on new here in new york. it is amazing it has not affected the markets more sharply than it has already. price,f you cannot get a you will not necessarily put in a trade to buy or sell. that is what mike was just saying, that you could do it through someone else, but maybe they are overwhelmed by someone who would have gone to the nyse. mike: and you don't is usually have a lot to say about where the order is going. he goes to the best price. and prices are still moving in the market. there are many questions this is raising. there was an issue reported earlier this morning. cg connections. i wish i could tell you what those are.

when there is a glitch like this, there is always some computer component acting up. it is something in the various connections between the computers and exchanges. pimm: i thought that was a commodity trading platform. but we will find out. once again, the new york stock exchange suspends all trading as of 11:32 a.m. we will find out more about what was happening at the nyse. no evidence of a hacking attack, at least according to the department of homeland security. the composite indexes were all affected, because they use the prices to put together the s&p 500 and the dow. the nasdaq continues to operate accordingly, and it is down about 1.5%. julie hyman is standing by with more details. julie: i want to recap the news you and discussing. a.m., the headline

crossed that the nyse was suspending all trading in securities. a short while later, the nyse said all open orders would be canceled while the suspension is going on. at new york stock exchange this point in terms of floor trading in the month of june has controlled about 13% of overall trading volume in the u.s. there are a number of different exchanges in the u.s. through which orders now go, and those together comprise the bulk of u.s. trading, much larger than the nyse floor alone. of price is a question discovery and the other exchanges and how well they work with the shutdown of such a large portion of u.s. trading. we don't have any update at this point from the nyse. we do know that throughout the morning, the new york stock technicalas reporting issues with trading. it said at one point it was affecting around 220 stock

symbols. it reported these issues and then said it had resolve these issues, but it looks like by the time we got to around 11:30 p.m. -- 11:30 a.m., 11:40 a.m., the nyse had determined it was no longer able to resolve those. or was happening often enough it could no longer resolve those. that is when he did -- when it decided to suspend all trading in securities. it will be interesting to see if the nyse options are unaffected. a also comprises a chunk of separate trading on the floor. if you look at the neighborhood averages -- the major averages, the dow the s&p are trading a bit lower. they took a little bit of a blow, but not a huge one. pimm: i want to bring a guest. rourke, joining

us on the telephone. what do you believe this is and what does this mean for people trying to buy and sell today? michael: it is funny, if this happened 20 years ago when i actually worked on the floor of the nyse, it would have been a much bigger deal than it is today. but right now, as julie noted, the nyse is such a small percentage of the daily trading volume and there are so many electronic networks out there, this is a minor blip at the , especially with new york stock exchange listed names. oft of the 200 year history the new york stock exchange, any stock listed, about 90% of the order flow traded through the specialist down there. in the past 15 years the market structure has changed, and everything has gone electronic. trading, we are

trading just as we would any other day. we are interacting with the marketplace and their is no problem with the -- there is no problem with the execution. as the market has it evolved, we arethe upside is that not relying upon one institution or one place. i just checked ibm, which has keyys been a long-standing new york stock exchange listing. yesterday it traded about 3.5 million shares, but only about 20% were on the actual nyse floor. now, thetuation stands markets are operating perfectly fine. matt: 20 years ago, would you have seen any kind of glitch that would halt the entire floor for half an hour? or would you have been able to deal with it better at the time, on the floor? michael: there were definitely

glitches like this. the exchange was well ahead of their time. it was always the best technology available -- it was not always the best technology available. we had glitches like this. yes, glitches happen any you are using technology. to have ae nice little more color as to what created the glitch and what is going on. you are seeing the pattern here of the new york stock exchange having issues and the airlines having had issues and there is a worry about hacking going on. pimm: you mentioned something called fix, the financial information exchange. this is part of the electronic messaging and routing system that is used to connect buyers and sellers and brokers throughout the world. chainone link in the big

of these markets -- to me, it is fascinating. a few years ago, there were so many issues. we have the flash crash of 2010. and then we had knight capital almost going out of business by sending out a bunch of erroneous orders. then you have the nasdaq problem by sending out the facebook ipo. there was this climax of concerns about the fragility of the market back then stop that has kind of -- back then. that kind of gone away. we have not had a big list like this in a few years. -- a big glitch like this in a few years. this will bring back the focus to how complex the markets are with all of the various computers and exchanges. matt: and to mike's point, there is a reason we have not had such a freak out. and the reason is that the nyse is only 10% to 13% of the volume.

we had a halt in all trading for over 30 minutes and still stocks have not dropped below a 200 point loss on the dow. the fact that there has not been applied -- a complete panic attack speed to how well they have done in spreading out the order flow and maintaining safety. pimm: let me bring in julie hyman with more detail and perspective from traders who know this business. julie: i was just messaging with dan mcmahon, director of institutional equity trading at raymond james. and to bring home the point that you guys were just making, when i asked what effect this was having on his trading day, he called it a nonevent. and he mentioned there are 40 other venues on which to trade stocks. i asked if it affected price discovery and he said they have in really relied on the nyse a significant fashion for price discovery since the 2000. 2000's.

this gives you a sense of the ite's importance, or lack of , in terms of decline on stocks. the climb was sparked by what is happening in china over the last several days. bythe decline was sparked what was happening in china over the last several days. that continues to be the focus at the nyse. pimm: julie, thank you. we will look for some comment from the chief executive of the intercontinentalexchange, jeff sprecher. but as we do so, we will go to washington. phil, what can you tell us? anytime someone like this happens, lawmakers are very wary

of something like a cyber attack. withe been on the phone multiple law enforcement officials. i have a statement from homeland security saying at this when they do not believe it's a cyber attack. threes backed up by separate law-enforcement officials i've spoken to in the last 10 minutes. but early indications 42 -- early indications are that there's nothing on the federal side of things pointing to any sort of cyber attack. federal officials are in the same boat we are, trying to figure out exactly what happened. thanks so much, phil mattingly. we will be keeping in touch with you. losing's bring in joe so -- joesoluzzi. he has been following trading

brokerages. what do you think are the weak links? don't know exactly. it is one of the exchanges. earliert out some notes this morning about a gateway connectivity issue. i don't know exactly what went on over there, but they had problems at the opening. we are not sure what is going on .own there rcahave been trading on the a and not having a problem at all. matt: we are in a situation where the new york stock exchange has been completely -- completely suspended from trading for over 30 minutes. typically it would be a total meltdown in financial markets,

at least in my memory. of the dow was only down 215 points. -- but the dow is only down 215 points. does this speed to the relative safety of the market that has been re-regulated over the last think it does i speak to the redundancy of the markets. there are other exchanges, which is a good thing. however, you don't need 11 stock exchanges. three or four would still have the redundancy effect and you would delete trading if one went down. -- you would still be trading if one went down. if one were to argue this they good fragmentation, i would argue against that still. one is not enough, but we have to many. but the day when this news affect happened. between 11:00 and 2:00, not much goes on. matt: let me pose that question another way. if we can go back, if the humans

were more active in trading and those guys down there at the barclays host were able to take things in their own hands had the power not taking -- been taken from them electronically by the nyse, would we be be in a better position? joe: i can't speak to that. when electronics break, you have issues. regardless of whether it is machines are humans, machines are involved. -- machines or humans, machines are involved in stop this is what people wanted, they wanted to get rid of the humans. you will have issues electronically. however, you work around them and you have to now deal with that. we have been very outspoken critics with some algorithmic type trading at high-speed trading, but in the end, electronic markets are a good thing. they added efficiency and lower transaction costs.

it is these types of glitches where he have a problem with them. at 11:32 a.m., the new york stock exchange suspended trading with these issues. it does not affect equities, i believe. but the composite and the dow jones industrial average, those prices are actually gathered from the nyse. those prices might be affected. once again, there is no evidence of any hacking attacks or security breach at the nyse, at least as far as law enforcement officials have been able to respond. suspended --s is officials suspended all trading as of 11:32 a.m. we are waiting for details on the outage from officials at the new york stock exchange.

salre speaking with joe uzzi. i'm wondering if you can describe what would be a normal trade route for some of placing an order. where would it be stopped at the nyse? joe: retail investors, they would place through a router. that is being intercepted. down,rders never make it retail orders. they never make it down to the order -- to the floor the first place. lehman orders may, but they will be rerouted. you brought up the indices, and this is something we are a little concerned about. until a couple of years ago, primary trades only were the ones that affected index calculations. what i mean by that is if you are listed on the new york stock exchange, only nyse trades would affect the calculation of the

index. if that is the case, then that means they are not being calculated correctly. that is the call we need to put into new york to see what is going on. a couple of years ago they wrote an article in the paper about it and it was being called the phantom indices. i'm not sure what is going on right now. pimm: they will have to rebalance those funds at the end of her trading today -- the end of trading today in order to affect the movement of actual stocks. but if you cannot get the stock prices, that makes it more difficult. joe: correct. hopefully they will clear up the issue soon, and hopefully by the close. the nyse, the most important time of the day is the opening and the close, as we all know. they are located in the middle of the day, and we can hope that they get it cleared up soon. pimm: julie hyman has been tracking volume at the nyse. i wonder if you can tell us what is going on with shares of ice

as well, those are down. julie: yes, we have seen the shares trending lower, taking a lower leg as is going on. here is 11:30 a.m. when we first started to get those headlines. the shares are down just 1.9% thomas a we are not seeing a collapse -- just 1.9%, so we are not seeing a collapse in ice shares. on the issue of whether we are seeing volume lower today, i will call that up here. if you look at the volume in the s&p 500, is actually up by a percent. -- 8%. but again, unusually high volume yesterday. if you look at the longer averages of 10 days, 30 days, 100 days, we are still up in terms of volume. the traders i can he can to are

saying, we are still trading as usual. matt: let's be clear where the volume is. you have a lot of information on that screen. w on theis is just the bloomberg terminal. vab, which is versus the volume at the time. we are 10% higher than the 30 day average at this time in terms of volume in the s&p 500. it hasn't seemed to put a big crimp in volume. pimm: thanks very much, julie hyman. we will be following this and helping us to understand a little bit more about market structure is sam moody, our bloomberg news expert when it comes to market structures. what do you think is going on right now? there was a-sam: technical issue and they had to halt trading on those exchanges. they had an issue before the open, but then they had issues

again later. these two exchanges right now are not trading. matt: i want to continue to point this out. a lot of times, you have alarmist or sensationalist people in the media who freak out around these issues, and it's a huge deal. you do not see a market collapse and it continues to amaze me that we see the dow only down 200 points and it is still trading, even with a lot of other venues. you still see action and you still see relative safety in markets. sam: this is one of the benefits of a fragmented market. it also draws a lot of criticism. on monday, one of the other exchanges went down and it did

not have a lot of trading and no one really noticed. typicallyisted stocks close and there is a lot of volume there and a lot of funds use the closing price to set their numbers for the day. but we are still several hours from that. nyse to your last point, is working very hard to fix it. i noticed they fired a lot of people that had decades of experience working with issues like this when i started at the nyse. do you think they cut costs too much? because it doesn't seem like they're fixing it quickly, nor are they disseminating a lot of information. m: in situations like this, the exchanges can be quite hard to get information from. a technologyught company and will upgrading all of the technology systems later this year.

that is what i've heard in the background. i think they are aware that perhaps their technology is not the best in the industry and they are deftly going to upgrade. i want to bring in phil mattingly, joining us from washington. can you give us an update on anything from government officials or regulators? phil: one thing that has been stressed in the past few minutes is a lot of things happened around the same time. the united flight in grounded, the wall street journal flight -- site going down, and the nyse. i'm being told what happened with united and with the nyse are not remotely connected, at least that is what they have seen so far. something to keep in mind as you look at everything happening at once, or seemingly so. that acrosssue is the board, and this goes for

dhs, fbi, justice department as well, they are all paying attention closely to this. they are fairly certain there is no malicious intent here. i know there are a lot of people that don't believe that. you can tell on social media when you put it out there. at this point, there are telltale signs that it has not changed. in dealing with law enforcement for a number of years now, they do not make these statements if they feel they will be proven wrong quickly. it is worth noting that as of now, they are pretty certain there is no malicious intent. conspiracy theories are so much fun, which is why people engage in them. and you could look at the fact that capital is trapped in many places. and it is not just here in the u.s. a lot of you have people with money locked up and cannot get it out. this could appear the same way. but it is not the same situation here in the u.s., is it? move your wealth

in and out of asset classes, even with the nyse down. sam: yes, and i've spoken to people who said they have their orders and sending them out and theiry have tweaked orders and are sending them out and it is business as usual for now. pimm: the new york stock exchange has been suspended, but this does not include stock options, and it does not include nyse arca as far as we know, and it does not include trading on the nasdaq or the other exchanges. we are waiting for details about the technical issues they've been having. but as you are seeing floor traders standing room waiting for information, we of course, are waiting for information. this will have to be something that they are going to check out because of the open orders that will be canceled.

few can describe something called the financial information exchange ,fix. mike reagan spoke earlier about this being a messaging situation syndication between buyers and sellers. i wonder if that is affecting the issues. the nyse this morning put out an alert that they were having issues with the fix. they did manage to fix those before the opening. it does stand to reason if that was the issue before him, maybe it came up again after the 11:00 hour. but at this page, we just don't know. but it seems that may be one of the issues they are experiencing. i talked to a couple of brokers on the floor about five minutes before i came on set with you that there are technical problems and the nyse is not getting back to them through the handhelds.

the communication devices are not working right now. pimm: i want to bring in another guest, jim angel from georgetown university, who is an expert in market conditions and structures. he joins us on the telephone. i wonder if you can describe what is going on. there's clearly a technical issue at the nyse. in a competitive market structure, the nyse is not the xchangeity that trades listed stocks. but the other entities are picking up the slack. outage thee partial stock market. let's bring in larry trout. i want to get information about what he believes is going on. he is the founder and chief executive of the test group, and he's an expert on financial trading systems. what do you believe is going on, if anything, at the nyse?

from things and hearing through the grapevine, it seems there fix engine could be out. that could mean one of two things. --fix the protocol that is the protocol that allows them to communicate between each other. it could mean two things. one is, the actual server that ,ranslate the messages is down or there is a problem with safety and the network may be down in some way. new york is one of the only exchanges that has a single network entity that enables folks to communicate with the data center in new jersey. if the network is having a problem, if there is a telco create -- thatat

could create problems with getting into the data center. has to do with not only the outage that is taking place, but what about restarting question mark will they give a warning as to when trading will start? i think the exchange has its own rules. trading,nasdaq halted it was a slightly different issue. they're having conference calls all up and down the street right now and they will be saying, ok, in 30 minutes we will have a restart and open it. matt: will they release that information? we are going to restart in 20 minutes and we are getting everything ready? sam: hopefully they will issue a streetwise alert and get everything ready. pimm: right, in order to balance their books because of the orders are canceled, they will

have to go back in and reopened and also i'm also getting messages from traders on wall street that say they are getting prices off of bloomberg. that is a redundant system for many of them. james, i wonder if you could comment on the market fragmentation. is that a good thing? james: yes, and i hate to use the word fragmentation because it makes it sound like a bad thing. what we have is a network with no one node as a single point of failure. the competitive structure is providing backup. even though one exchange is down, the other exchanges are picking up the flak. see prices you will on the other markets, like the the -- the and like rca working.

matt: a lot of market participants think the fragmentation -- sorry to use the term -- is too much. the problem is people have connection costs. our market is less fragmented than ever before. i can see on my trading screen exactly what is going on on all the different exchanges. back in the old days when people yelled and screamed at each other, you could not see what was going on. hang on one second. i want to bring the headlines. the new york stock exchange says this is an internal technical problem and not a cyber breach. the nyse says the shutdown is approaching an hour. the chicago based on ecosystem is functioning normally. trades are unaffected on

other exchanges. they chose to suspend trading on the nyse to avoid continuing problems and they decided to suspend trading in order to prevent perhaps even worse problems from taking place. they are not letting anybody know. recap everything today, first of all, you have the ongoing situation in china. this morning, we learned that the chinese are suspending trading for six months for all their major's shareholders and ceos and company directors, etc.. they arty had suspended more than half of the company. already had suspended more than half of the company. china shutting down all u.s. -- pimm: you don't like conspiracy theories. matt: i don't like conspiracy theories. the wall street journal's website was shut down. now you have the new york stock exchange. it is kind of a great wednesday, isn't it, as far as the things

concerned. i'm not saying there's a link, but there's a lot going on today. pimm: you just did. matt: from listeners, they understand that there is so much news in addition to what is going on in greece. if you want to link those things together just for fun, you can do that as well. pimm: james angel from georgetown university is still with us on the phone. the new yorkeed stock exchange voluntarily decided to suspend trading at 11:32 a.m. to avoid further problems, why would they have not told people beforehand? james: they are still trying to figure out what is going on. when you have a technical glitch like this occurring, this is something that is not planned, not anticipated, and it could be a very minor glitch, like maybe a comm line needs to be reset.

that happens quite frequently where one line goes down for a few seconds and he gets reset and nobody notices. in december 2013, a similar event occurred in which a number of stocks, including several dow stocks, stop trading in the nyc. and most people didn't notice. what is different this time is that it appears to be affecting all the symbols on the nyse. you're seeing a much bigger outage. her markets are complex technical networks. changes are made in those networks every single day. as exchanges do things like upgrade hard drives, refresh software, make all this maintenance changes that make -- get made everyday. eventually, something is going to go wrong. it is not a question of preventing all mistakes. it is a question of how do we protect ourselves from the glitches that are inevitable. pimm: hang on. i just want to mention that we are receiving reports that

president obama has been briefed on the shutdown at the nyse. no further news is available from his reaction. we will find out from phil mattingly in washington. i want to turn to julie hyman who has been tracking cyber security spots, even though we want to make it clear that both the nyse and the department of homeland security say there has been no hack attack on the nyse. julie: these two stocks in particular tend to be very reactive to any perception or whisper a cyber attacks. of course, we also had some other shutdowns that we have been talking about. we do not know the causes of them, but we had united airlines being affected by technical issues good "wall street journal".com. for whatever reason, you tend to see fire i and hal allah to -- fire eye in palo alto networks stock move with technology

issues good both of these popping at around 11:30 a.m. or so. just another stock related movement that i wanted to point out. contintalinter exchange, a missed a backdrop of stocks that continue to trade. i want to make that clear. they are trading lower. the three major averages all down by more than 1% as investors look to china and traders keep on trading even as this goes on. pimm: thank you, julie hyman. recap, the new york stock exchange as reports from the department of homeland security saying that there has been no cyber attack on the systems of the new york stock exchange. the new york stock exchange says they halted trading at 1138 2 to halt11:32 a.m.

further problems. they say it's an internal issue and not a cyber breach. larry tabb joining us. larry, if indeed the new york stock exchange fixes this problem, will they give us a two-minute warning to tell us that the systems are up and running? larry: they will wind up providing you with advance notice. they typically go down and come back up. there's an auction process to get everything moving again. the turn on for new york is very different than nasdaq in other markets. they generally have an open requires people on the floor and everyone to resubmit orders to the point where they find an opening price and then they open. that cannotthing happen and immediately pop back up. that new issues is york one has a .5% market share in their own stocks. they don't need to trade any

nasdaq stocks at all. it only impacts nyse stocks, which they only have 25% market share on. everything should be trading pretty normally in other venues. it is really not a major issue, exchanger the new york which is not look good. pimm: this does not affect trading in options at the moment. larry: they do trading options on the amex. the amex is also down. there are 11 other options markets. so that is not an issue either. pimm: i want to bring in phil mattingly, who is standing by in washington i wonder if you can give us an update. the president has already been briefed on this issue. phil: just to underscore how serious this has been viewed, president obama has been briefed by his top advisers on the issue. law enforcement and the n.y.c. stood by their views that this was no malice intended by what

happened. it was more of a glitch or some type of internal issue and not a cyber attack. obviously underscoring the importance of the new york stock exchange, the president was briefed by top officials. to get behind the scenes i will goes on in a situation like this, the president's top of advisers will let him know what is going on. his cabinet along with the treasury department and their markets team are keeping a very close eye on this. or from a law-enforcement hacking perspective, but basically on the market perspective to see it there is any need whatsoever for them to escalate their involvement in this type of situation. as it currently stands, they do not see that existing right now. the white house pointing everybody to the securities and exchange commission for any further comment into the new york stock exchange itself in the president has been briefed and the team very in the loop and keeping a close eye on this. very much along the lines of law enforcement. they believe it's a new york stock exchange issue.

while they have an eye on it, there is no escalation of worry on their part. if anything, it has de-escalated. matt: they seem very chilled out about it. the marketring up boards, to give everybody a reminder, we were down 200 points at the open. we did recover at one point to a loss of 140 points in the dow jones industrial average. but we continue to fall a little bit into this issue and have not taken much of a hit since then. there are at least 10 or 11 other venues where client orders can be routed. i've talked to a number of brokers who work on the floor of the new york stock exchange and they have told me, look, we have always been able to route our orders to a number of other exchanges and we do that on a regular basis. today is no different. we are waiting for information on the new york stock exchange, the glitch is not really hurting notcustomer orders and

hurting asset prices. it has not heard prices of stocks or bonds today. as iteld is still 2.23% was when tim and i reported on it a few hours ago. pimm: that thing also considers the composite indices, for example, the s&p 500 are computed using prices from the new york stock exchange. get this fixedo before the close in order to have accurate reflection of what goes on with those composite indices. i want to find out more. sam, how long would it take to get trading backup? what role will regulators have in this? julie: you can be sure that the sec is on the phone with very senior new york stock exchange officials, wanting to know exactly what is going on and when this gets fixed. to your point, moments ago, the close would be a more serious issue if they do not get fixed by the there is definitely a couple of hours right now that they have to try and fix this. you would imagine that there are hundreds of people on the problem and getting it fixed.

when nasdaq had a problem in august 2013, the stocks were down for about three hours. we are already in our industry -- an hour in this. matt: it's a black eye for the coffee. when the facebook had ipo, it brought a lot of business to the nyse. it's a little surprising that the shares are not down more than they are. they were up by 1.6%. pimm: let me just mention that the nasdaq has released a day statement saying that nasdaq systems are operating normally and our trading all symbols, including tate a, which is the new york stock exchange securities. nasdaq confirming seeing a pickup and take a shared trading in tate a shared trading volume following the suspension of the new york stock exchange issues. leading 30 2 a.m.

this morning, the new york stock athange halted training -- 11:32 a.m. this morning, that -- new york stock exchange halted trading. it affected 220 stocks and the n.y.c.. it accounts for troy 5% of the volume of stocks -- 25% of the volume of new york stock exchange stocks. other exchanges like the nasdaq as wellating normally as the other electronic exchanges, such as that. larry, can you speak to the issue of what is going to happen with all these broken orders? what technically needs to happen in order to fix this when trading begins again? be --arry: the question will what is the status of the orders when they close? if there were orders in flight, how were they canceled or were

they just not canceled? the questions of the brokers are asking right now offer the orders that we sent to new york before they went down -- did they get filled or not? that could be problematic. if i sent in order to the exchange and did not get filled, that is probably ok. i can probably route it somewhere else. if they got filled and i did not go a got filled, i could be electrocuted. that could be a challenge because all this challenges might have to be reversed. matt: i will say that i spoke with a broker earlier who is down there on the floor. he told me that all the orders were in flight at the time or canceled and sent back to the brokers. larry: that it should not be an issue then. pimm: i want to bring intense duffy. terrence duffy is the chairman and the president of the cme group based in chicago.

thanks so much for being with us. what do you know about the suspension of trading on the new york stock exchange? terrence: i don't know a whole bunch of other than what i've heard. i have been testifying on the oil been here in the u.s.. this all came out during the hearing. what is interesting is i know that they had a glitch preopening. they fixed that glitch and they got the markets back up and running. i'm assuming that same glitch shut them down at the 11:30 a.m. time that you referenced a moment ago. these systems today are extremely complicated. they are global systems. it is very difficult when your you are operating technologically. pimm: no one seems to know the reason. terrence: i do not think they are too collocated. two things -- first, you reference the orders that were put into the system.

where are they at? would they be in limbo or executed when they come back online? no, there canceled and sent back to the brokers. that is what we do. they are not too complicated, but they do have problems, no different than human elven -- element problems we had in the day. this is the world we live in. they want speed in acucar fusion -- they want speed and execution. matt: you are obviously at the cme, a competitor of the nyse. experience the same kind of difficulties once in a while? is it possible this can happen to any of the exchanges in the u.s.? terrence: not knowing exactly what the glitch is, it is difficult for me to say. we have concentrated systems. it is 60% of our overall budget that goes into i.t. and assistance. very hard to have a reliable system, but there are things that do go wrong. the question is you have to make

sure you have the right people in place to know what they are and get you back online as quick as possible. that is critical. now they're down for an hour and a half or two hours, that is a long time to be down. the good news for the people those issues,ng they have the ability to trade them somewhere else. pimm: we also know that trading in options has not been affected. there is trading in such exchanges like the arca. what can you tell is about those systems that may be different? terrence: they may be on different match and just. at the cme, we have several different match engines. it could be one of their match engines down not affecting another of their matches. it is very common of the worldly and -- world we live in. at cme, we had different matches for every different asset class. that could be what is going on at the nyse right now. matt: do you expect that after they resolve these issues there

will be a postmortem and all members of the industry will be asked to share their thoughts on what indeed cause this? terrence: i don't know. there will be a postmortem at the nyse. whether other exchanges will be involved in that, i do not believe so. the nasdaq is up and running. we at cme are up and running. we have our buffers in place. equity indexes. we have a 5% rule that we have put in place many months ago that we had diplomatic today. orther the market goes up 5% down 5%, we will not go further for the day. we are in that protocol right now to make sure that there is order in the market and that it does not go haywire because one of the equity markets has shut down like the nyse. matt: what do you think of market fragmentation? arelly market participants really against fragmentation and think of it as a bad thing. i guess because it spreads out share so much. but in a situation like this, fragmentation looks like the

savior. terrence: you could say that, but i still believe that market fragmentation does not lead to a better price for the end-user. fragmentedented and is a work for a reason. when you have multiple people competing for the product, you lose part of the liquidity on that issue to different venues. hence, the price is different. but everybody wants to complain about high-frequency traders. one of the things they do do is keep those prices in line. market fragmentation -- i'm not a supporter of the i believe in the political silo. i believe it gives better pricing to the end-user. matt: this shows that we need multiple venues. , atnew york stock exchange least in name, is the most famous stock exchange in the world. it is completely shut down and has been for an hour and 15 minutes now. and yet, that has not hurt asset prices. not.nce: it has

i think you referenced it when they traded 22% of their own listed stocks at the nyse. they don't even try to a large percent of their own listed stocks. you are traded at different venues. again, that is the world that they live in. again, i do not believe it leads to better pricing. in an issue like this, i see what you're try to reference. if people have access to other markets, competition is good. be fragmentation. we should be rewarded for what you put into your marketplace. pimm: you mentioned the trading in equity auctions -- options and the equity index options. the prices for those composite indices, many of them come from prices set by the nyse. if we do not get the system of and running by the end of the day, what would be the effect on those equity index options? terrence: i think you will have to see what that weighted averages. i do not know what it is beyond the caps off from. -- cash option. that is something that others

who trade caps off since -- cash options would be concerned about. we trade based on an s&p 500 index which has no affect on us. matt: when nasdaq had his problems, the new york stock exchange to the high road and did not make any negative comments when they cut off and took market shares that way. you seem to be doing the same here. nonetheless, this does not look good for the new york stock exchange. i've got to guess that it gives more is this to bob and you. -- business to bob and you. terrence: i do not know if that is true. the new york stock exchange is iconic. it's part of americana fit the last thing i want to see is anything go bad with the new york stock exchange. i'm rooting for them to get this issues fixed. i subsidize with them because these issues are very consultative. i hope they get back up and do not suffer reputational harm because of this. i do not believe it will. pimm: i want to give you an

opportunity to explain what you are doing in washington today and your testimony regarding oil. terrence: we are here to testify -- there is a bipartisan movement right now, bill 702 in the house, to lift the ban on oil exports the united states. as you know, refined products are allowed to be exported of the united states could what is not allowed is crude oil or what extent is an immediate. -- west texas intermediate good we are saying that this product should be exported around the world. 9day, we are producing million barrels a day in the united states could it does not mean we have to export 9 million barrels, but it's no different than food. this is the only product that we do not export. it reflects on the issue going back to 1975. there was an estimate that came out of the hearing today that i think is really profound. if in fact the dam was lifted, you could add 1% to gdp. if you look at an anemic gdp, adding 1% is a huge number. this is a big issue for the

united states to live this ban and be part of the world market and know that full well that we will continue to produce and invest in our was up last year and put it to the world market. it keeps prices low at the gas pump. that's what is important. it's all about consumer. matt: you're fighting for free markets and protectionism. terrence: absolutely. you, terry duffy. pimm: let us go to julie hyman, who is standing by with more details about the shutdown of the nyse and today's trading. julie: we have all been talking about the shutdown now for the past hour or so. in the meantime, trading continues to pay folks. we have seen volumes not get hit by the situation. the selloff in the major averages looks to be the biggest we have seen in the past couple of weeks or so. still, stocks down more than 1%

across-the-board on concerns about china in particular. there is continuing uncertainty about greece, but it seems that attention is more focused on china today. a lot of companies get the bulk of their revenue from china have been following. at my bloomberg terminal and what we call the imap of the various sectors. all you see is red. it is a broad-based selloff as well today. this was the case even before this nyse shutdown, just to make this clear. telecom, technology, energy, materials, all selling off in today's session. i want to get to what is going on in today's technology. ; their shares are selling off of the second day in a row. yesterday, it was because advanced micro devices had cut its earnings forecast. we have seen continued selling across the semi's today. down 6.4%.

sky works down by nearly 5%. we are also seeing selling among energy stocks today. we have seen oil prices higher. we'll get to that in a second. transocean and phillips are just three of the energy stocks that are lower. the whole energy complex seeing declines. as for oil prices, we are seeing yet another day of decline for oil. right now, down 2.1%. 51.21 a barrel. straighte fifth day we have seen declines good that is the longest streak in a while and the biggest five days slump in oil prices in nearly four years, since august of 2011. that is notable as well. is going on at the new york stock exchange and talk about market structure, i do want to tell it that the selloff in oil and we have been talking about the intercontinental exchange is down 1.8%. pimm: thanks for a much. julie hyman, we will be

following this evolving story. i want to thank you very much. matt: i'm going to jump on the fence. i may go down to the exchanges to try to figure out what is happening now and when it should be resolved in what the fallout might be. pimm: if you find out what's wrong and you can fix it, please do. matt: i will. if i conflict the right switch, i definitely will hit it. pimm: i'm going to be staying on. there will be more of "bloomberg market day." and i'm joined now by mark crumpton. this is fascinating. i've been listening for the past hour and a half. there has been issues about technology, and hazmat point it out, national security. there are issues about redundancy and how the system is supposed to work, or in this instance, perhaps the system did not work. in either way, we are all over this. i like the way this rolled over there. pimm: mark crumpton, i did not know you had wheels.

let us go to phil mattingly in washington for an update. he getting some reports from the securities and exchange commission. still, what are you getting out of regulators? phil: the full after that suit of regulators have weighed in. the sec has a very important role here. its chair in a statement says, are in contact with the new york stock exchange and are closely monitoring the situation and the trading of their listed stocks. " one key point that she makes is that stocks are trading normally through other venues. the sec you not only in touch, but keeping a close eye on this. -- i got e-mail from a lot of force missile are saying the fbi had reached out to new york stock exchange early on in the process, along with the department of homeland security. everybody tried to figure out what is going on. saying that there is no longer any need for law enforcement action to be taken or pursued. we know the department of homeland security has been saying for about half hour now

but they do not believe there is any malicious intent here. the fbi was also involved early on in this process and it appears they have come to the same conclusion. there are no longer operating under any sense that this is essentially malicious. they are backing with the dhs has said and what the company itself has said and what other law enforcement officials and the white house is set as well. very much, phil mattingly. we're going to follow this developer. more on this bit idea that they are saying that we have all these other redundant systems, but complementary systems. how long can the system continue without the new york stock exchange operating? sam: up until the closing auction. at least until 3:30 p.m., no one will notice a difference at all. once you get to closing auction which is when mutual funds and index funds and every thing uses of the newthe close york stock exchange, that is one maybe you could notice more disruption. he would be fixed by then. been talkinghave

about for the past hour and a half, you take a look at the boards and what is going on. asset prices, customer orders, they really haven't been hurt. sam: this is the beauty of the fragmented and computerized market. he can stay away from new york stock exchange and carry on trading as normal. this is what people have been doing before. mark: that is funny. when mr. duffy was on talking to you earlier when that was here, i wrote down what he said. he is not a fan of market fragmentation. he supports a vertical silo. he believes it affects prices. sam: it's good for business. he is the ceo of exchange company and silos are great for them. pimm: what responsibility does in exchange have in order to post prices? sam: the new york stock exchange and the nasdaq stock market are the prime listing exchanges. at the close, their prices are most important. throughout the day, the regulation, the republic exchange, the self revelation --

regulation, your public quote is a protected quote. that is what people see on the bloomberg terminal. that.a quote happening on pimm: i mentioned earlier in e-mailing the traders on wall street and throughout the country, they say they have been able to get the prices on the bloomberg. they are not relying on the nyc. that will be different going into the close close that is when the managers in the mutual funds, plus those people who are managing etf's, have to readjust the press. mark: as joe was telling you guys earlier, the silver lining here is that it happened in the middle of the day. it don't happen at the opening or closing of the market. this is lunchtime or snooze time if you appear it's more of a quiet time. pimm: let me just recap. this is "bloomberg market day." i'm tim cox you with mark --

pimm fox here with mark crumpton. the new york stock exchange suspended trading in its issues. it does not affect trading on the arca or other exchanges. the trading in stock options continues as well as trading in futures. the new york stock exchange says there has been no evidence of a hack attack or cyber attack on any of the technology systems. i got byalso been law-enforcement officials as we heard from phil mattingly in washington. the fbi and the department of homeland security saying that there is no evidence of a breach of these internal systems mark: has julie hyman correctly pointed out, a small percentage of the overall trading volume of around 13%. a lot of people have been saying that this is a blip, that you did not see a panic as you, sam, and matt had pointed out here at stocks are trading