thank you very much, bob. "power lunch" is going to start in about 20 seconds time. nasdaq is not trading. the nasdaq composite has not moved in effectively 40 minutes to 50 minutes' time here. this is impacting other trading out there, folks. the situation is fluid. it is dynamic. i'm going to send it to my colleagues on "power lunch." it's big news, folks. see you soon. here's "power lunch." >> brian, thank you very, very much. breaking news as we have been reporting for the last 45 minutes, better part of an hour. nasdaq says trading in all -- all -- nasdaq-listed shares has been halted until further notice. cnbc's team coverage continues. let's first go down to bob pisante. what has changed since you last reported? >> still status quo. nasdaq about 45 minutes ago announced they were halting trading in all tape c securities. tape c is essentially the nasdaq

exchange tape. a is the new york stock exchange tape. now we're going on 45 minutes with a major exchange essentially halted. in theory, you can trade many nasdaq listed stocks on other exchanges, including here at the new york stock exchange. right behind me, in fact, are nasdaq-listed stocks that trade on the nyse. however, the new york stock exchange a short time ago halted all training in nasdaq listed stocks here at the nyse specifically at the request of nasdaq. so essentially, here at the nyse, we're not doing any trading nasdaq-listed stocks right now. >> let me interrupt before i toss up to bertha and give you the latest from nasdaq, a statement that just arrived here. it says nasdaq intends to reopen trading in all tape c securities with a halt cross with a five-minute quote only, period, started at a time to be

determined. nasdaq will not be cancelling open orders on the book. customers who wish to cancel these orders may do so, and any customer who wishes to not participant in the reopening should cancel their orders prior to the resumption of trading. they will clear all quotes from the sip prior to the commencement of trading. obviously, a lot of inside baseball talk here, bertha coombs. what does this mean functionally? >> what this means functionally is they say it looks like maybe they're getting closer to bringing the system back up. obviously there is going to be a lot of discussion here. much as we saw with facebook when people couldn't get their quotes, couldn't get their trades, a lot of people ultimately were really unhappy even a year later on trying to settle those trades. so that's likely going to bring up a lot of controversy, a lot of conflict on what happens with these trades. traders say to me this morning from what they saw, there was no particular action. it wasn't like we saw a big

move-up in volume or any biggal -- big algorithm trade go through. all of a sudden you couldn't get quotes. it appears nasdaq has asked other exchanges not to trade nasdaq-listed securities at this point c point. for traders it's very difficult because that sip, that security information feed is really where you get your information as to what kind of price is going on wharon, what kind of quotes are going on, so you really can't trade without having a sense of what the quote is at any particular time on that security. things like apple where the majority, 95% of the volume here on the nasdaq, you cannot trade that right now. so even as people talk about perhaps going to a dark pool, one dark pool told me we had to bring these feeds down.

we cannot trade them right now. we are waiting to see what happens when nasdaq brings the system back up. >> let me turn it over to the guys at the "fast money" table to get some clarity on what exactly when these tape c securities begin to trade again. they say they're going to do so with a halt cross, with a five-minute-quote-only period at a time to be determined. what exactly does that mean? jump ball, who wants to take it? >> bill, right now it means that i think they're trying to restart the system over there on the nasdaq. they basically didn't want the other exchanges depending on the quote that was coming out of their sip, more or less that national market system where they're trying to say this is the best sip, best offer, which is what sal was saying. they need to restart their system, it seems, so they can get a fresh start. but the problem is, just like with facebook as i was saying, that they've got so much quotes traffic coming in that they have to stop all that from getting to their servers and that requires

more or less -- >> also, i think that allows people to commit, and if you want to pull your order rather than doing it later today or tomorrow, you can cancel the orders out there. >> that's key, right? nasdaq is saying, if you do not want to participate in this quote-only period, cancel your order now -- because i would imagine, guys, what's going to happen -- let's say they open at 2:00. i'm just making that number up. but it's two hours after the affected number of halted securities. how crowded do you think that open will be? >> i think they would start to prepare for it. but i think from the bigger picture, brian, rather than speculate what that order window is going to look like, you thipg abo -- think about the exchanges told us they needed to become for-profit exchanges, needed to become public so they could modernize their equipment, so they could be ready for things exactly like this. it seems as though the pace of these glitches over the last five years are accelerating as more and more things are being done electronically.

>> you look at some of the flash crashes from a couple years ago, some of the crashes. if i'm an outside market participant and i already feel like the system is rigged to the big guys' favor, i see more and more stuff like this. it is just a baseball back to the continued need of market confidence. >> i think what you do right here, and if i was back in the days of ten years ago managing 300 traders, i would put the directive out to every one of them, we don't put the orders back in the open wech. we want to see if it's back working for 60 minutes. we need to be patient. we wait to determine what the actual causality of this is, and i would say that this is specific to the nasdaq. i don't think this is specific to the new york stock exchange, and i don't think we could lump the stock exchange in with the nasdaq. the nasdaq has issues. sorry, tyler. >> let me jump in here.

what would you do, guys, if you had placed an order that you believe was not executed? they say that if you want to cancel your order, you can do it. what would you do if you had orders in that were frozen? >> tyler, the unfortunate answer, if i could, tyler, unfortunately in the course of my business career, that has happened dozens upon dozens of times, whether it be on globex with the cme, whether it be with the new york stock exchange. that's just part of it that professionals deal with, unfortunately. >> tyler, you've been doing this a long time. i began my on-air career in 1998 at the nasdaq site when it opened. the date it opened is on times square on liberty place in manhattan. during the height of the internet bubble, i don't recall any times where we had system glitches not just with the nasdaq, with the markets in general, do you? >> no. >> so this has been the last couple years, despite the fact wii gotten more, quote,

sophisticated with 30 dark pools and 30 different exchanges, the problems have intensified. >> i don't remember an exchange going into sort of lockdown for going on 50 minutes, since about 12:20 was that last quote, as you see there on the nasdaq composite. so this, to me, is pretty unprecedented, and to your point, it looks like these kinds of glitches intensify and become more frequent. i think any way you look at this, right, guys, this is a black eye for nasdaq. >> it's a black eye specifically for nasdaq, and i will introduce the conversation, and i'm sure many folks will come after me and twitter in the business media, but let's take a look at hft. let's take a look at the high frequency models. what are they doing, as sal said before, to the plumbing which is clearly antiquated? what is different between now and 1999, tyler? it's the introduction of rapid fire training. i think that's something we need

to consider. >> let's go to the floor of the new york stock exchange, see what they're hearing, see what their analysis is. >> the talk is much the same down here at the moment. kenny, what's your take on it? >> this is not a systemwide problem. the new york stock exchange is trading fine, right? this is a very specific nasdaq problem, and so it's causing kind of concern across the board. but at the moment there is no issue here. >> to clarify the statement that they've issued here, this is a normal opening that they're going to attempt. it doesn't usually take very long. >> no, but when you stop trading a stock and you have to reopen it, you go through the process, right? it's like a reopening process, which is essentially what they're going to do. i would imagine they're going to do it in stages, because as a number of the other guests have said, you want to do it slow. because if there's an issue, you don't want to ramp the whole thing up and have it blow up. >> specifically we believe the issue is the security information processor that gives best prices, that gives information out to everybody. there's a problem with that and

that's what people will sue on if they get it wrong. >> that's right, because if it sends out wrong quotes and wrong bids and offers and people were trading off that, that becomes an even bigger problem, which is why they have to clear the system, essentially flush it all out, get all the information out and repopulate it. >> do you think it will happen with what happened on facebook? this is a complete shutdown in order to ensure there is no misinformation. >> i agree, but this is the problem. again, all the guests have said it. this is a problem with kind of the market structure that we have today. sal has said it, joe has said it, it's all this technology coming together. it's high-speed trades, rapid fire in, and the system -- >> just to step in, i know you're going there to blame high frequency trading as the problem here, but that wasn't the situation. >> no, no, i'm saying let's put it all together and look at market structure. we have a problem with market structure in this country. we don't need 90 venues to trade spots because they don't trade like retail. >> i agree with that point. the point is we ever the system

that the securities exchange commission wanted to have. they have to dismantle the nyse and the nasdaq monopoly, they wanted to open up competition, they wanted new exchanges to come in, they wanted to trade in pennies. this technology did come about and offer high frequency trading, but we have the system that they wanted now, and i agree with your point. it is needlessly complicated. >> sorry, i think the system is working very well. there is a problem somewhere. while they work on that problem, they shut the trades down so nobody has a disadvantage across all platforms. to me the safeguards are working given that you have a problem. >> in that case you're right in terms of them safeguarding the system. but, in fact, you shouldn't have to shut the whole system down, right? for instance, if one market center is down, we can trade nasdaq stocks in other market centers. but the problem now is the other market centers are essentially being infected because there is a problem with the sip. >> bear in mind this system is old.

nasdaq is old, nyse is old. there are trading systems that exist and the hedge could have occurred in a simple upgrade or something else. >> let me just jump in, simon, and point out something we put on the screen a moment ago, and that is that dow jones reports that nasdaq is expected to resume trading, quote, shortly, according to a source cited by dow jones. we do not have independent confirmation of that, but we should point out as we go into 55, 53 minutes into this trading halt of securities. simon? >> let's cram in a quick break if we can. more on the halting of the nasdaq tape c stocks in a moment. this is cnbc.

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if you're just joining us to cnbc, across all stock exchanges in this country, we have had a halt in trading of all stocks that are listed on the nasdaq. nasdaq omx asked all platforms to halt trading due to an information problem at 12:15 eastern. we remain now in that situation. we do hope, or they say they hope, to attempt to restart trades at the nasdaq and across those platforms very shortly. let's go to the nasdaq markets right now, and bertha coombs has been talking to some of the traders affected. bertha? >> that's right, simon, we have not heard from the nasdaq when they will do that reopening, but talking to traders right now, they suspect that this is going to be very much like an ipo. so we'll have about five minutes

where they will show the quotes and trade except, rather than having it be just on one security, we're talking about the entire universe of the nasdaq. one trader telling me, saying, nasdaq has never done this type of open for their entire universe before. so this will likely be a very big test for them. when i asked him, how will this compare to the facebook ipo open where we saw that huge volume essentially take down the system, he said, it's not a big volume day right now, and he's not sure we'll necessarily have that huge pent-up demand. the fact that it's happening in the middle of the day, not near the close, certainly makes it a little bit easier. as far as trading, one of the largest volume trading nasdaq-related stocks is the qqq. that's the etf for the nasdaq 100. that is halted in terms of trading. but the knock-on effect we have to think about is with all these underlying nasdaq securities not trading that it's also impacting

the s&p 500 and it's impacting the s&p 500 etf. so it's not just relating to the nasdaq even though the big chips are trading, it does have some effects on the market. >> robert holmes just pointed out to me, he's one of our market experts on the news desk, that a fifth of all the s&p 500 stocks actually trade on nasdaq. so the quotes you're seeing there for the s&p 500 and the etf that would be the spider that trades in that index would be, well, 20% off, because we don't know what the prices are on the 20% of stocks that are traded in nasdaq. tell me, though, bertha, why is it that this is such a gnarly, tricky restart. it's not a nascar race. but why is it any different than every day at 9:30 when those stocks start trading and open?

why is this different and trickier? >> we don't know exactly what it is that caused the quote system to go down. so essentially they are trying to do the forensics in realtime to find the source, whatever potential glitch that might have been that caused it, and then repair that glitch. so essentially, if we're talking about nascar, we are trying to see if all of a sudden you lost a couple of spark plugs, your carburetor isn't working -- i'm not a mechanic, so please -- maybe my analogy isn't quite right -- but you've got to try to change the wheels, got to try to fix that in realtime to get yourself back on track. >> a real racer, brian sullivan. >> i wish the analogy was out there, tyler and bertha, because i'm getting some e-mails from folks, and we're seeing big spreads. maybe if you're looking at an option or tax spread, it might be a dime. now people are saying this could go up to $5 or $3 because nobody knows where the price discovery is going to be. >> they need to wait and see if

they actually have price discovery. in other words, brian, i think a lot of people are concerned that when it restarts, is it going to be as fluid as bertha just said when it starts at the bottom of the hour, at 9:30, when normal trading begins? that's what they're going to attempt to do with this restart of tape c. >> and it's important for everybody to understand that this is no longer just a nasdaq story. while the problem may have originated with a nasdaq computer system, as you heard bob pisante say, those trades are being wiped out. john, i also understand you've got ice, you've got gemini, you've got batch, you've got all these different exchanges. if you're one of those exchanges, would you trust a quote? in other words, is this going to impact almost all stocks on all exchanges? >> brian, i've got to jump in here for a minute. i wouldn't trust it. i don't think you can trust it at the moment. you've got to wait until they clear the system. that being said, we're talking only about nasdaq names. there's no reason not to trust the quotes and the trading that's going on because we're unaffected by it, right? >> kenny, is there a reason --

let's say i wanted to buy ibm right now. no position of size, just mom and pop stuff. why do it given what's going on across many of the market systems? >> because it's only taking place in one of the market systems. all the other markets have closed down at the request of nasdaq. only the nasdaq stocks that are trading. new york stock exchange stocks -- >> we're getting e-mails that margin requirements, for example, are being raised in certain areas. this is a much bigger issue when you have a fault at the center of the system. >> so then maybe there's more to come that we all don't know yet, right? maybe there is a much bigger issue they're still discussing behind the scenes. >> we are now at one hour and counting, folks. >> how do you think the dark pools are being affected by this? >> the dark pools are no longer trading. they're all stock. >> i will say, and to me it's

mis mi mistifying that nasdaq has not gotten on and spoken to the press about what's going on right now. it really lends to the lack of confidence you're giving the trading community. >> when it happened with facebook, they kept their mouths shut, too, an hour and a half afterwards. >> they have to protect their own business, they have to protect their trade. they have to find out what's going on before they start making public statements, which could be inaccurate. >> simon, simon? you hit on a very important point which many people made. unfortunately, all of us are old enough to remember when the exchanges were private. now simon hits on a good point, which is this. we are, in some ways, experiencing the complexity of being both an independent publicly traded corporation and being exchanged where other stocks trade across your platform, because maybe oftentimes the goals, the desires, the messages will not always mesh up, will they? you have that natural conflict

now in some cases to protect your own brand, but you've got thousands, millions of people out there who were saying, what the heck is happening with my stock trade? >> absolutely, and now we're going on over an hour. the quotes you're getting on the xpy spider, if those quotes are real, since this started over an hour ago when the markets shut down, the markets are trading higher. if this holds true, i think maybe it speaks to the fact that people are getting used to it. because you would expect that you knew the nasdaq would get shut down for an hour, you would expect some sort of mass selling. >> we are not an emerging market. why are we getting used to this? >> if you're trading this market, the price is what matters. that's really what you have to look at. >> let me jump in, guys, because we have a guest on the line. david greenberg is the head of greenberg capital and a former nymex member. mr. greenberg, how is this

affecting your business, if at all? >> there is no reason to panic. there is no news out besides the fact that you can't get orders in that will really cause people to get worried at this point. they're going to sit back, they're going to wait for the exchange to get back up, and then they'll start trading again. >> so has it affected you at all, or are you just sitting there waiting as we all are to see what happens next and how and when they roll the open? >> well, exactly. you know, there's not much you can do, but at this point, like your guest said before, people are getting used to this. it's not like the market is going down t2, 3, 400 points. there's news out and people can't get out. it's a relatively slow day. it's not the major deal it used to be. however, it is annoying and it really goes back to the issue i've talked about often. when news does come out and this happens, what then? >> what does this do to confidence in the investment community, confidence more

broadly among individual investors that they are able to trade and trade safely and securely and reliably through the nasdaq system? >> well, each time this happens, like what we had with facebook and some of the other situations, it arose the confidence. that is going to be a day where you get a mass move in the market, god forbid it be a terrorist attack or something else. when people can't get out of their positions, that's what will scare people, and i think people will trade cautiously going forward. >> so what i'm hearing, correct me if i'm wrong, thank goodness this is taking place in what is relatively a news vacuum and not being caused, or as far as we know, tied to any broader event that would cause people to run for the exits in a kind of a panic mode, right? >> exactly. we're in a slow day in august. if we were on a busy day that a government number came outwei w off and you had massive movement

in the market, we would be having an entirely different conversation right now. >> we were having a slow day until about an hour ago, folks. simon, down to you. >> let's take a quick break. i remind you all trading on nasdaq platforms has been halted for an hour and 4 minutes. nasdaq says it will attempt a reopen shortly. you can cancel sororders if you have orders in. we'll be back in a minute. ♪

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welcome back to our breaking news coverage of the trading interruption at nasdaq. we are showing you right now only two indexes, and really only part of those two indexes. there the dow industrial is at 51.28 and the s&p at 54. remember, some of the constituents of those trade on nasdaq which has been frozen in place now for an hour and 8 minutes because of some form of technology issue in their systems over there. so when you see those dow quotes, when you see the s&p quote, remember that about 20% of the s&p 500 is made up of nasdaq-traded stocks. and on the dow, there's cisco, there's intel, there's microsoft that are nasdaq-traded stocks. let's go to dominic chu now. he's been making phone calls to

find out what traders expect when the market at nasdaq reopens. what are you finding, dominic? >> tyler, it's very interesting right now because we've been talking about this nasdaq/nascar analogy, if you will. this is in essence what nasdaq is trying to do is a rolling restart. you have a caution flag up right now. everybody is going around the track, following the pace car, going very slowly. and eventually what's going to happen, they're going to open up quotation. they're going to let people see it for a few minutes before anything happens just so you know where that market traded on any stock in nasdaq where it's supposed to be pricing, all these participants kind of putting in levels of where they want to trade. after that happens, then they can actually start resuming the act of trading, if you will. the important part here is whether or not there is going to be any type of hiccup going into that process. if there is not going to be a hiccup there, what you, in essence, have, like i said, is a rolling restart where the market participants know where the

levels are, where the market is and then they can actually start trading again. tyler, this is obviously very fluid right now, but i spoke to one equities adviser on wall street, and he says he's just trying to manage around the situation right now. it gives you an idea of just how important this is to equity shops around wall street. >> chu reporting for us. i want to go down to simon and the team at the new york stock exchange, but i want to lay on the table, folks, for everybody to ponder. let's say you're twitter and you're thinking about where you're going to take your listing. what do you do now? >> hello, new york stock exchange. >> you're preaching to the choir. >> i need another objective opinion. >> just only subjective of facebook. >> we have some breaking news. let's bring in aimen jarvis. >> hi, simon, that's right. i want to give you a little sense of what would be going on

at the sec. we have a statement saying the sec has been monitoring what's going on at the nasdaq and that we've been covering the last hour or so. in general, let me walk you through the procedures they have. they have the division of trading and markets, and that's the division that's responsible for monitoring these exchanges and figuring out what's going on. the acting director there is a guy named john ramsey. it's his team that maintains what they call a hoot and holler line. that's a phone line that's open all the time. think of it as the red phone here between the sec and all the exchanges, and what they do on that hoot and holler line is convey information on one exchange that all exchanges need to have at that moment. they try to keep that line very clear. it can go hours and hours without any sound on it at all, but when there's a crisis, that phone line is in place so they can immediately communicate with all the exchanges, the information they need to have and all the systems off can get that under way. i think you can expect that they will have, at the sec, some sense here of what's going on by

the end of this afternoon at the earliest. but it still could take weeks to do the forensic analysis of what happened here. you remember going back to the facebook situation, we were seeing reports coming out weeks and months after that incident. that could be the same thing we can expect here. so don't expect any real final answers on this today from the sec or really from anybody else, because it can be very, very complicated. but those tradings in markets, people, are the folks who are going to make the decision also whether or not to extend trading hours into this evening. that's one thing they have the authority to approve. it doesn't seem, at this very moment, that that's something that they're going to need to do, but they do have the authority to do it and it will depend, really, on how long this outage lasts and how much people are inconvenienced by it, tyler. >> ayman, thanks very much. i'm going to toss it back to brian and the "fast money" group. i would love to hear you guys explain to me one more time why

a restart -- and brian, you picked 2:00 -- why that's any more tricky in this circumstance than the thought of trading generally at 9:30 in the morning? why is that trickier, number one? and number two, what if they said, we're out for the rest of the day? we're not going to pick up until tomorrow morning. >> it's trickier. but when i traded commodities, that's when we did it over telex. it's trickier because you don't have to deal with a bunch of canceled orders. >> it's bigger than that. you think about how a third of trading is etf related. these are participants like knight and some are getting orders that include both new york stock exchange listed names as well as nasdaq. how do you make that basket? if you can't get orders off on the nasdaq stocks that are incorporated in that etf, what do you do? i'm not getting any feedback from people i know if thn that

position. ayman said something interesting. the sec should know in a few hours what the problem is. one would think the sec should know before the nasdaq opens. i'm not speculating on what the nasdaq knows, but if the sec isn't opening for a few hours, will the nasdaq reopen without the sec? >> i think the nasdaq will attempt to reopen and probably will be able to reopen -- >> even before informing the sec about what the problem is? >> anybody, is their smartest move, and as we get close to 2:00 with two hours left in trading, just to say, we're done as of 12:20? >> you don't want to do that. brian talked about canceled orders before. you may have some orders out there you're not filled in on or you're not necessarily sure. the resolution of those orders,

you don't want it to go to the weekend, you're up against friday afternoon. you need more time. >> the calendar is only thursday. >> exactly. tomorrow is friday. you've got the weekend coming. you wanted this to happen on a monday or tuesday. >> one of our viewers wrote in, what if you have options expiring tomorrow? >> right, and those are options that will expire tomorrow. not every stock has them, and the s&p has them, those stocks are a big part of the s&p. >> so you've explained to me why it's going to be trickier when they reopen. that has to do with a backlog of cancelable or canceled orders. two, the senate has agreed it's a bad idea to just wait until tomorrow morning to restart. the last time there was a major systemwide shutdown was of nasdaq for reasons of technology june of 2001, and back in 1987, a stray squirrel shut down the

nasdaq system. the squirrel was in trum bubull connecticut. we don't know if there were any squirrels involves this time. >> something called selectnet wasn't able to trade once, but nothing of this magnitude. >> the june 1 was also, i believe, a system problem. >> a myman brought up an importt point earlier. the sec has in front of them proposals for a new series of technology. they put this out for public commentary for a while now, and basically what it would do, it would impose on all the exchanges uniform standards of technology equipment. that's what we're talking about. we're talking about systems here to impose standards on everything that's uniform, to make sure everybody test the systems in the same way and properly make sure that they came in the same way. >> let me take it out to

chicago, and jeff killburg, he's at the cme, and the cme has told us this trading interruption at nasdaq has had no effect on any of their platforms, nymex, comex and the like. jeff, what are you hearing and what are people paying attention to? >> tyler, no squirrels here in chicago, but this nasdaq is a very interesting situation, and a lot of folks who were involved in the facebook debacle, it's still a fresh wound and this is a black eye on the nasdaq. but i don't think it's really that harmful to the market. the futures market. there's a reason we have all the futures print at the top of the screen here at the sec. you saw people come into the futures market in the nasdaq specifically, tyler. they went down about 10 handles and now they're back to where they were before as we're all sitting there waiting for this uncertainty. the futures market, this is why managed futures are so important to this whole economic system we have here in the united states, but having that access and that

liquidity is pertinent and so pertinent today. >> jeff, thank you very much. let's go back to ayman jabbers. we're now an hour and 27 minutes into this shutdown. >> we were just talking to a treasury official, the official telling me secretary lou has been updated on this situation with the nasdaq. you guys talk about the sec rolling all this, there is an inherent intention the sec is trying to do as we speak right now, because they want this fixed. they want this market up and running again. they want orderly markets throughout the united states. so there is tension between wanting to know what happened and not wanting to get in the way when folks from nasdaq are trying to solve this problem. >> nasdaq would also be very mindful of last time around it

was charged $10 million when it might have known it had a problem. the sec was vociferous at the time, saying poorly designed systems and hasty decision making, and i think they, as a business, will be very mindful of that, first and foremost. >> there is a tension now in the short-term goal, which everybody shares which is to get the market up and running, and then the long-term sort of cya, for lack of a better word, in terms of blame shifting of what happened and whose fault it was. >> you want to get the market up and running but nobody wants to take a hit for this. >> that goes to the point of now it's a real business, right, so they have to make a decision for their business and they have to make a decision for the trading markets in this country, so which comes first? >> they may be the same, so if you have to litigate for them making a mistake, it might be the same. >> let's take a break. >> i'm sorry. go ahead. >> i was told to take a break. >> i was going to say the other point here on reg ci, that's the

regulation that would make systems have something in place. that just expired back in july. they may not even be able to get that in place until the end of this year at the earliest. it's a very slow-moving process here. >> one hour and 20 minutes since we had any action on the nasdaq. we'll be back in a minute. i put in the hours and built a strong reputation in the industry. i set goals and worked hard to meet them. i've made my success happen. so when it comes to my investments, i'm supposed to just hand it over to a broker and back away? that's not gonna happen. avo: when you work with a schwab financial consultant, you'll get the guidance you need with the control you want. talk to us today.

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i join you with a breaking news situation. it is now one hour and 50 minutes since we had a break in the nasdaq system. we believe it's with their security information processing unit which essentially gives out pricing information. it has therefore asked that all platforms halt trading on all those securities until it is able to restart the pricing accurately. people are able to cancel orders that may be in. obviously this is a moving situation. let's go down to the nasdaq market site and bertha coombs for more. bertha?

>> simon, we're not getting any update from the nasdaq as to either the cause of this apparent glitch or when they will be reopening trading. we did get a message on the nasdaq trader site that was disseminated that they were getting closer to reopening, and when they reopened they would have a five-minute-only quote period beforehand. they will try to sort of match up the orders. they said at a time to be determined, and we're now 41 minutes since that message was posted and still don't have a sense of what time that will happen. traders that i talked to here, what they've done is pull back their orders and they will reenter them at that point when we do start getting that quote system to get a better idea. but with the sip -- that's the initials for basically what the quoting system is -- unable to get information on what your quote is going to be, you cannot trade right now. what's interesting is the knock-on effects here. with no nasdaq securities able

to trade, that also impacts etfs, that also impacts funds. i saw a note from one trader who says he's taking a look, and basically the price. if you were a fund manager that you want to pay for a stock, so you don't want to be too much more than what the volume-weighted price is for that day when you're buying it, so you feel that you get the best price. well, on certain funds, now that vwap is a bit out of whack because you don't have those nasdaq underlying securities trading within the funds. what's more, traders here in the u.s. trading in realtime were able to do that, but if you are someone overseas trading nasdaq securities and you have your algorithms in place to trade, now all of your trades are out of whack and you may not be up to take back and cancel some of those trades ahead of the reopening here of the nasdaq. so there are a lot of ripple

effects that will happen. one thing that traders are saying is we're in the middle of august, so the volume is low. it's in the middle of the day, lunchtime when the volume is lowest often, but it's still a problem. >> bertha, great analysis, though. you know what, so we got lucky with the timing. what if this happened yesterday, two hours before the federal reserve minutes? what if it happened right before key earnings report at the close of trading. couple points here, you guys. i know we have a trader coming in here as well. if our sources are saying a trader that bertha cited or we ran a banner at the bottom that they're hearing the nasdaq will open in an hour or so, that is certainly not what nasdaq has told us, and it's certainly not what they've put on their website. nasdaq needs to make that available to everybody. i just want to throw that out there, right, john? because in a trader is hearing that, where is he hearing it from? an official at nasdaq?

you know what, don't give information to one party and not another. >> they're talking to the technical desks to the technical desks are making their best bet. but in these kinds of situations, as we saw with the facebook ipo, the nasdaq is to get into that bunker mentality before they put out information that's wrong. unfortunately, that creates an information vacuum as people are waiting to see whether the system will be up. you recall the facebook situation. we still didn't have very much of a comment by the end of the day, even as that took some 45 minutes to open that stock. >> and, of course, bertha, and it's a great point, that information vacuum you referred to with social media has led to all kinds of theories. case in point, apple. if you take a look at alp, the stock collapsed right before the nasdaq stopped trading. so people were saying, does this have to do with a massive volume position? >> can i just throw one thing out? i think this is really

important. >> look at the apple drop before the market stop. >> if you were to ask yourself which publicly traded companies are most at risk other than the exchanges to any kind of prolonged lapse in trading or any other issues, you would say the banks. however, every single one of them, save for wells fargo, is green right now. goldman is up, citi is up. the way to look at this is everything is orderly, it's a system outage, nobody is freaking out and the banks are probably a really good tell that that's the way to continue throughout the day. >> let's go to bob pisani who has information on what the backup systems are like on lots of these trading platforms. >> i've been asked several times by e-mail by people, isn't there a backup that nasdaq could actually bring up? the new york stock exchange has a backup system, nasdaq does, too. but here's the problem. if the system is broken, you

have to refix it and then you have to restart it. if the system, the network that carries the quotes, is itself having problems, it doesn't matter if you're hooking up to the backup system, it's not going to work. so the overlay, the system on top of it that carries the quotes and information isn't working right, it doesn't matter if your backup system is there or not. so that's a key point. people have been asking me about that. >> it seems to me if you're not getting the wriright quotes, yo can have the backup system, but if that critical cog is not there -- >> which is exactly why it's not opening, because that piece that carries all that information is, in fact, the piece that's broken. >> kenny? it's brian sullivan back at hq. i want to ask you this. let's say i've got a weekly option on whatever equity future, whatever it might be, right? and the option expires tomorrow. maybe i'm out of the money on the option, just a bad bet.

do i then use this and say, hey, you need to cancel that option bet because i was going to get out of it. i didn't have the time. do you see the point i'm making here? >> i absolutely do, but i defer to bob and jerry. they may be better for this question. >> this provides an out for a lot of people, does it not? hey, i was about to sell but i couldn't. >> there could be a pretty significant liability here, and it's why many of the exchanges are cancelling the orders, so they don't get stuck with could have, should have, would have. >> honestly, if they cancel an equity order, what does that do to the underlying option, do we know? >> unless it's linked to the option, it has nothing to do with it. in other words, you could trade stocks or options or link them together with a covered right. >> i want to point out something. a lot of people who trade on a

daily basis, remember what happens, they go in in the morning, they start positions in the middle of the day, they start looking to get out of the positions. so there is a lot of -- call them day traders for lack of a better word, people who need to go home flat at the end of the day. so it's very important to get the thing opened quickly so people can get out of positions who need to, otherwise you might get a flood of sell orders if it opens at 3:45, and there may not be enough buyers on the other side. that's a little bit of a risk here. that's why you want to open as quick as possible. >> we want to squeeze in another break, guys, but i want to amplify something that brian sullivan said a moment ago. we need to hear from nasdaq. we need to hear not from a source, a trader source, saying he here's this system is going to be up within an hour. we need to hear from nasdaq what's happening, when are you going to be back up, and what can we expect from you? they are quiet and they need to talk. folks, we're going to take a break. ♪

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welcome back to cnbc. we're now an hour and 33 minutes since we last had a trade on any nasdaq stock on any platform in the united states as a result of a trading glitch. we believe a server problem at the nasdaq. it is requested that all trades on its stocks be halted because it can't give accurate pricing and therefore it might be liable in the market. it is fair to say there is no panic. the market hasn't fallen, but there is strong emotion, a lot of frustration. let's go to dominic chu who has been talking to the traders for an hour and 30 minutes. what are they saying? >> i got off the phone with a number of senior equities traders, department heads, and they're just trying to manage the situation right now. there doesn't seem to be a sense of panic among the traders i spoke to, but one told me he's talking to clients and he's tried to advise clients, hey, don't get too involved right off the bat. we want to see things settle

before we actually go back in there and start trading heavily or trade actively in that market. still the yellow caution flag out, and i'm curious what our "fast money" crew thinks about this. if you're in the market, would you maybe hold off another 20 minutes before you start engaging again? >> yes, absolutely, dominic, i'll answer that. you hold off to make sure the system is operating well, and we always talk about when things like this happen that necessarily stocks move to the downside. how about them moving to the upside? the market came in short, folks have to cover. why is the s&p higher right now? i'm looking at the futures trading 1653, up 650. possibly the markets go high. >> if the nasdaq reopens and we get green print. >> do you guys feel it's important the nasdaq reopens today? >> it's very important they reopen today? >> why is that?

>> because if you go into tonight and this is on headline news, it's an old story if it reopened and everything was orderly and the market has actually rallied into that news. but if we go home tonight and you're locked into a position -- >> there is options exploration, there are things that will move individual stocks. forget about the whole market. you can't have news diss dissemination and have people freaked out. >> we're talking a lot about these big indices and all the etfs we've mentioned here and some, of course, we've glossed over that have big nasdaq percentages in them. if those can't trade, they can't price. think of the double and triple levered etfs as well. this could be a nightmare if they can't get it open. >> i think it's important to note, mike, you kind of touched on this, tyler, and we're not seeing any drops on this. it's not collapsing the market. we're not seeing any drops here.

i think that's important to bring home to our viewers. they're saying, oh, my god, what's happening. what's happening is there is no stock trading on nasdaq-performing stocks, but what we're not seeing is some huge pain to come. at least not right now. >> as i look in the dow, the dow is actually higher, if i'm recalling correctly, at this hour up about 61 to 63 points than it was when we began the hour. let's go to bertha for some of the latest for what she is hearing. >> we're not hearing a whole lot that's new, tyler, and folks are just waiting to hear when that quote period, that five-minute quote period before the market reopens gets back up. essentially it is a wait and see situation. what's interesting here is if you start taking a look at the nasdaq, the nasdaq had gone positive for the week, and a lot of traders were talking this morning about the fact that you were seeing here a little bit of appetite for the beta names, even the googles, the apples,

the facebooks have been attracting more volume and they have been performing well. the nasdaq deposit has been outperforming the other averages today. it's not the case when you look at the exchange stocks themselves. year to date the nyse stock has actually outperformed the nasdaq stock. it's up 27% compared to a 6% increase in the nyse. for the business model, this is going to be an issue given that it's coming so soon on the heels of what we saw with the facebook ipo. it's something people are going to talk about. as far as volume, from what ewe understand, we've been seeing more volume. in nasdaq it's been averaging about 8 million shares. their normal volume is about 3 and a half to 4 million. when you see that area that's been impacted by this apparent

glitch in the kwoequoting syste that's the nasdaq tape. the average volume has been about 1.6 billion shares. it's not a huge amount, but certainly a sizeable amount. >> let me pick that point up because obviously people are referencing what happened with facebook. on facebook's first day, if memory serves me correctly, it traded at about 450 million shares. so is this open going to be tough? >> i think the open is only going to be tough. i think what will happen a lot of guys will pull back the orders, and they're going to wait and see and watch it open. then if it's functioning properly, people will start to jump in. i think what the smartest thing to do is for people to actually take a step back and make sure when they reopen that the system is, in fact, working. >> on a broader issue, let's talk about what this really means. so the sip failed, and the main point of the system failed here, and there is a single point of

failure here, and there is a problem with the design and implementation of these systems. it goes back to the legacy associated with these. >> bob, i'm going to have to interrupt. as bob said, the sip failed, but when those stocks start trading, there is going to be a big gulp. it's 2:00. we're now an hour and 40 minutes into the nasdaq not performing. >> here is your top story. as they said, just about two hours ago we saw a halt in all nasdaq stock trading. it's an impact that has really been on about one-fourth of all nasdaq stocks initially, but it was enough to essentially bring all nasdaq stock trading to a halt as well as nasdaq listed stocks at the new york stock exchange. it is impacting options, it is impacting some exchanges, and as the wall street journal's front page, an article says right now, everybody, it is questioning,