the fact that the nasdaq requested these stocks be halted as the justices from the outside the nasdaq that perhaps they can't control or gauge which tells me i'm not pointing a finger anyone, it sounds like the situation with goldman sachs. i am not saying it is them. i'm not accusing anything but don't like another outside program. you could show it is a summer science project gone awry yet again where there is an al gore rhythm or program or mechanical system that has gone in and not done what it is supposed to do. in terms of quote and activity. cheryl: clarify your comments with goldman sachs. want to declare what you are saying, we are doing the best we can, dimming speculation in what is happening at the nasdaq, the nasdaq telling us it is a data error. we expect to hear from them at any moment but clarify your thoughts on the goldman sachs

angle. >> the only goldman sachs angle here is like two days ago there was an issue with option markets from the outside in that case goldman. this feels once again this isn't an exchange problem, not a problem within the nasdaq. sounds like something from outside coming in that they don't understand or can't gauge and that is going on. that is the only comparison i am making. there are so many market players. we have the centralized exchanges that are supposed to be responsible and a palpable. everyone is feeding off of their data and going in, one big happy melting pot of a global marketplace. what is happening is a lot of stuff happening quickly and even the people in programming don't understand what it is and that is my only point. my point is tuesday was goldman, today we don't know who it is. it could come from anywhere, some kid in his basement. cheryl: i want to clarify the breaking news situation and make sure i clarify again there's a lot of speculation, do

appreciate you weighing in on this and say on this if you can and let our viewers know. about 46 minutes ago, all trades on the nasdaq, everything, was halted. it is a data issue. that is all they are telling us. every single stock on the nasdaq has been halted. we are waiting to hear from them. we are digging into the story right now. nicole pratt not standing by on the new york stock exchange. nicole: i know we have talked about these issues. when i was talking to the

traders about the dark pool trade, you do not know what price you are getting. i would leave that to the experts in the people who really know what they are doing at that point. they have access to a couple names. we are not trading those stocks. we are working with the nasdaq to keep everything that day. it would include some really big names. we're talking about some of the really big names that we know. we are in close contact with the exchanges.

dennis: thank you, nicole. they tend to reopen trading. a five-minute quote only. that helps almost not at all. when the nasdaq and the new york stock exchange, when they start cooperating-- charlie: we should point out that they have cooperated in the past. they went to mary schapiro last year and basically urged her to do something about market structure. the regulatory story, i think, is where this will turn. there is the market. there is a structure story.

i think that nicole misspoke. i am interpreting this. when i call up my broker, my broker can execute a trade. they can be routed to a dark pool right now. here is the problem. the small investor does not really know what the price is. the price of facebook is not necessarily what the price is on the nasdaq stock exchange. that is a bit problem. >> we talk about exchanges where sellers and buyers get together and they facilitate that. some of them are not heavily traded enough.

it is good for a handful of big names that are actively traded. for a majority of them, i do not think that it will be much. >> if you have competing exchanges, they will compete upon execution. this is a big story in the market structure sense. small investors may roll their eyes. it affects you. it affects whether you can trade or not. everyday we hear hear about insider trading. how the small investor does not want to get into the market. >> i want to bring in sandra smith from the cme right now.

what are we looking like at the cme right now, sandra? sandra: the equity markets are in fact coming back. we did see that uncertainty on the overall markets. this story developing down here on the trading floor, while traders do watches unfold, is the columnists while the market is reacting to all of this. this is the market today. >> dow jones has a headlight coming out right now.

charles: she talked about the call. the fact that the world is not going crazy right now is a good sign. >> the dow is back up to 43. let's go to a trader. michael, i want to read something to you. maybe you can translate for us. the nasdaq put out an alert. they talked about this trading system.

now we get into whether the issue may be with this united utp plan. >> what i can say is this, everything you just went through, what it comes down to is years and years ago everything was decentralized. everyone was allowed, all of these different venues. no monopolies. what you just described what we are looking at is, it is like when you take the christmas lights out of the addict and they are all tangled together. there is one light in there that is making all of them not work. it is great to have other venues. it is good to have liquidity.

the problem is when the geniuses who create these things and run these things do not know how to run them. dennis: thank you for being with us, michael block. let's go over to nicole petallides. back to the floor of the new york stock exchange. nicole: a note pertaining to the nasdaq reopening. the nasdaq will not be canceling open orders on the book. customers that wish to cancel their order may do so. some urgency here if you want to cancel the order to get in and do so. a big drop in yahoo! prior to the halt. that may be something we look at

as well. >> the fbi is aware of what is happening over at the nasdaq. let's check in with brian finch right now. we are looking at a potential computer glitch here. would you cover the issue of cyber security, you have to wonder, are our systems safe? was this a mistake? we do not know. >> you are exactly right. we do not know if this was a cyber attack or not. the vulnerabilities of these exchanges are well known.

about half of the world's exchanges were to some type of cyber attack within the last year. it is an inherent problem when you rely on technology. there could be a flaw in one of the systems that allow bringing down the system. dennis: i think they be reduced the chances of this having anything to do with an outside attack. >> a rather sophisticated system that they are talking about. it seemed hackers can go with a lot less sophisticated approach. >> i think that is right.

especially when we are talking about china. they do not appear to be interested in, you know subverting the infrastructure. now, some nation states are known to have that kind of interest. they have been blocked in their attacks simply by and in capability to do so. there is a subculture of crime that is out there. you can hire rogues. they will conduct these attacks were relatively small amounts of dollars.

spend a couple hundred thousand dollars and you could get into the most sophisticated systems in the world and cause a problem. dennis: thank you very much. cheryl: we have nicole petallides it, of course, sandra smith standing by. we are awaiting some type of statement from the nasdaq. the nasdaq is intending to reopen. it should be happening at any point. nicole, are you getting anything more? nicole: it is interesting to see if there is anything trading on the nasdaq. obviously, nasdaq is the primary exchange for certain stock. the question is whether or not the new york stock exchange

stock is still trading at the nasdaq as a secondary market. that seems to be going successfully. that would be a name like ibm or dupont or american express. the names that are primarily listed here are probably trading just fine at the nasdaq. again, as we talk about canceling orders, you can wish to not participate in this reopening. i also sent a note upstairs at the new york stock exchange to see if anyone wants to come on down and explained the procedures. they do were together. it is about the consumer and keeping everything status quo. dennis: let's go back to michael block.

more information is coming in. there is a tape a four main traits. there is something called a tape see processor. that may be the thing that is down. >> it is a little harder to fix than just classifying security. they have kind of isolated it. now, they need to figure out what it is. i believe this is something coming from a market player outside. there were looking at reopening everything at 130. i think this will keep rolling and we will keep having this drama throughout the afternoon.

cheryl: it has been about 15 minutes now. michael block, if you could stay with us, i do want to go back out to chicago and sandra smith. there is trading going on there right now. sandra: i am just getting done talking to a trader here. right behind me is the nasdaq futures trading pit here in chicago. looking at the volume during this outage, there was an abnormal spike in volume during this outage. especially over just the past 20 or 30 minutes. nasdaq futures hitting a low of their session. the take away from that is that this product, the nasdaq futures could be used as a source of leverage or a source of hedging your risk if you or someone

holding an open position in the nasdaq stocks that were shut down. you've been conned and trade the nasdaq futures at the cme. again, these could be used as tools to manage your risk. something interesting to point out here in chicago. dennis: great. sandra, welcome back. let's talk to though co-author of "broken markets." a lot of these exchanges used to be autonomous and separate. as they have gone for more liquidity, does that end up exposing more vulnerability. >> the markets have gotten very complicated and very complex in regards to the plumbing. it is no longer nasdaq.

there are 13 stock exchanges. over 40 dark pools. they all interact and they all have to report their best offer to the exchanges who manage something called the step. cheryl: that word processor keeps coming up in a lot of conversations that we are having. going back through, we are now looking at and power of this halt. at the end of the day, i guess it is possible that the nasdaq maybe not trade for the rest of the afternoon. what does it mean to someone like you? how long of a process will that take for someone like you? >> we trade for institutions.

we were trading for several. our customers know what their positions are. it is not quite the same issue if you remember what happened during the facebook ipo. customers had no idea what they had bought or sold. that is one thing that we have going for us on the marketplace. what will change is that if nasdaq opened up today, the whole process for which they open up the market which is a five-minute quoting. , all types of high-speed traders start their quoting, we saw that work out for one stock. facebook in 2012. it is a light day. you just want to be careful.

limit orders. if they are going to trade on a day like today, make sure that they have limits attached to their orders. dennis: the new york stock exchange and other exchanges cooperating with the nasdaq and have agreed themselves to stop trading. don't you want more liquidity. if it was not a technical problem, what do you think of that decision if they did make it to decide to stop trading on the other exchanges as well and cut off the liquidity. >> i think it is intelligent. if you think back to the flash crash in 2010, what happened when one exchange was slower than the others?

it started creating backups in the entire marketplace and the old stocks, everywhere, it created this instance in the plumbing where no one knew what the value of a security was. stocks plummeted. that is the type of thing that can happen if you do not have exchanges coordinating and cooperating with each other. you can count on them to cooperate. cheryl: we certainly appreciate this. we're just talking about limit orders. the difference between an open order and limit orders. today is definitely a day where you need to have a limit order. we do not know what these prices will be. we do not know how things will settle. i want to bring in -- do we want

to go to nicole or sandra? nicole: yes. i am ready. we should say, at this point, you see the nasdaq up 31 points. it has been at that level for about an hour now. for the first time in recent memory, the nasdaq composite index was not being updated. it is also worth noting that the outage that we saw at the nasdaq is also expected to skew the calculation of other major market outages. the names, some of those names are actually members of the s&p 500. members of the dow jones industrials. you may see the markets fluctuate somewhat when the

nasdaq does in fact reopen. 28% of all shares traded so far this month. the stocks that we are talking about represented about 28% of all shares traded within the last month. cheryl: tell us about the difference between the securities and why this is important on a day like today. nicole: tape see securities are nasdaq listed stocks. the problem is with issues that are only nasdaq listed issues. nasdaq listed securities. by the way, they are already in the articles.

people are thinking about what happened with goldman sachs earlier this week. these are the glitches that people will be referring to the next 48 hours. cheryl: it has been one hour ten minutes since the nasdaq did halt trading. we are waiting to hear from the nasdaq. we are told we will get a statement at any moment. all we know at this moment, technical issues. they are working on the problem. this certainly has everyone on edge. >> a sign of how complicated and complex these networks have become. the lack of specific knowledge about where the problem began and where it spread to is really rather striking.

charles: i agree with that in that regard. although, they probably just have not hammered it down. the dow is not down 400 points. something is work an end the public is not panicking. i happen to be happy that we are not crashing right now. i do think that we have a serious issue. there are a whole lot of stocks that trade on the nasdaq. cheryl: we are calling this a flash freeze.

certainly, we want to let our viewers know that fox business is reaching out. this appears to be thus far is that this is a technical issue at the nasdaq that they continue to work on and are working on. trading is continuing on plan. the dow is up. that is nice to see on a day like today. nicole: despite the fact that they battle it out for listings and such, there are plenty of times that they do work together . they do have to work together sometimes in order to keep things status quo.

jason, what have you been hearing and what you think about what is going on so far? >> it is good to see the cooperation between the exchanges. this is the downside to not having centralized volume. i think that, i think that if you look back to flash crash where people were off trying to steal other people's market share, that is what magnified all the problems that took place during flash crash. this is a commonsense thing to ask people to shut down and figure out what the problem is. what matters most is that the customers trust the system and they do not feel this advantaged nicole: it is so important. what you are seeing now and you are able to cancel orders or the orders are being sent back to

traders, whether it is yahoo! or any of the other names, do you expect that you will see a lot of trading going on? >> i think if the nasdaq is their house in order by 3:00 o'clock, that is usually when we see the volume ballooned. i think if they can get their stuff in order by 3:00 o'clock, when most of the volume would come back to the marketplace, i do not think there will be a lot of market disruption. nicole: it is nice to see a sense of calm. itself is not moving. it's a big deal. there really is a sense of calm. it there is a sense of calm. >> but to be fair, it is third week of august and i don't think we would see a lot of movement in that index. we're not seeing a lot of movement in the dow to the up or down. so, look, this happened.

if it could ever happen at a time this is a great time for somebody lying this to happen, but again, given the choice you never want to see anything like this happen. >> right, ultimately you don't want to see things happen and have a normal trading day and get on with your family barbecues and the like. we'll continue to watch it. they say they will reopen shortly. traders on the floor are watching all the issues closely as well as the sec. we had comments from the fbi. seems everybody is involved in this one. cheryl: certainly, nicole. continue to talk to traders on the floor for us. i want to go over to chicago with sandra smith standing by. sandra, you received a statement from the officials at the cme. what did they say? >> shairl, just coming down the stairs with traders. busy working phones. we got comments from cme group in chicago, as far as their markets are concerned, they are saying there is no

impact of the nasdaq outage on trading here in chicago though obviously nasdaq futures trade here. no impact on their market. getting that aside, just chatting with traders talking about the massive amount of algorithms out there with the large investment banks. there is daily concern how those can really push the technological systems to the max. there is obviously a lot of trader speculation happening on the trading floor about what caused this, what might happen in the future. obviously a lot of that is just speculation at the moment. considering this is the largest exchange in the world, trader here not impacted according to the cme. by the way we got out of the nasdaq futures pit where they did see a spike in volume over there. as i said very simply put, those traders are saying they believe a lot of large institutional players that might have had outstanding trades on the nasdaq might have started to trade the

nasdaq futures to hedge some of their risk. there is a sense of calm on the floor. that is important to point out as well. maybe a couple years ago you wouldn't have had that. you might have had more fear. sounds like this marketplace apt handling such glitches right now because they have seen it before. cheryl: sandra, thank you for literally running to the camera. we appreciate it. we have reporters at all the exchanges. adam shapiro is enroute to the nasdaq to the work the story. dennis kneale, myself, charles payne in new york monitoring all the breaking news. want to let viewers know, that nasdaq halted trading 1:14 --, 12:14 eastern time. technical issue is all the nasdaq said to us thus far. they said they won't be canceling any open orders but customers can cancel orders if they want to. dennis: right. okay. we've got another guest to maybe shed some light on this. todd schoenberger joins us. he monitors the markets and

follows that awfully closely. todd, what do you make of this? i'm surprised the nasdaq still doesn't know exactly what went wrong. and traders at cme are saying no impact. the dow jones is up 50 points. so people aren't that upset. it is almost as if this is becoming commonplace, todd? >> well, that's the sad thing about it, dennis, because electronically we hear about these stories from the electronic market centers. you heard about bats. obviously the facebook debacle. now we have this today. you never hear about this from the human traders, from the guys on the floor of the new york stock exchange and this is the irony of all of this, we're only a few weeks, maybe even days away from the merger completing between ice and the nyse. there has been a lot of talk having all electronic global exchange only because of the slowness of having human interaction but realistically, guys, every investor right now, they would be best served having

slower execution as long as data integrity was in place. cheryl: you know what is so troubling? this is the nation's second largest exchange. we're not talking about some small exchange in some basement in los angeles. this is the nasdaq, todd and this is frustrating to everyone that trust the markets when you see this type of issue, a technical issue which is all the nasdaq has said thus far to happen and affect what should be a smooth financial day, a smooth markets day in the middle of august. they have to answer to this, todd. >> you said it business there, cheryl, here you are, end of august, very slow trading environment. can you imagine if you take a much more dynamic time frame, geopolitical event or earnings release or something else that really when you have a lot of involvement with the markets and then this happened? look, it is all about ininteresting get, guys. realistic -- integrity, guys. these computers are not able to handle this. think about the high frequency traders. you had sandra talking about

how a lot of institutional orders they may or may not be getting placed now. remember, a lot of hedge funds used high frequency algorithm. everyone will be impacted by the end of the day. dennis: todd, i hope you can stick around, the todd the human trader defending presence of human traders. reminding, every now and then a fat finger trade cause as 250 point bunge jump in the markets. nicole petallides talks to human traders at nyse. nicole, do we have anything new? >> we are watching dow, nasdaq and s&p. the nasdaq, the composite index has not traded since the nasdaq halted all those tape c securities. first time in memory that the nasdaq hasn't moved. see that flat line? it is interesting to note the dow jones industrials are up 52 points. i'm asking traders about the names, microsoft, cisco, intel which i believe are nasdaq stocks. i have to reconfirm that. what happens to those, when

those reopen? does that then rejigger the dow and the s&p? right, the s&p also has nasdaq stocks within it. to our point earlier is that the nasdaq outage affects not only the nasdaq composite index but also the s&p 500 index and also the dow jones industrials. so we're just checking whether or not it is those three? those three. intel, cisco and microsoft as i noted. you can see the flat line. it is pretty evident in those intraday charts. microsoft was doing well because if was upgraded over at nomura. that will be one to watch as they reopen, when they reopen the nasdaq. cheryl: we do want to bring in liz mcdonald. you've been on the phone, lizzie. what are you sources telling you? >> these sources are at the nasdaq. they're talking about what happened january 3rd. we also had a temporary freeze in trading that

jarred the trading desks on the nasdaq where still data was being fed into the markets. what was so key here, and you guys and charles payne, we were talking about this earlier, what happens when these stocks, these securities rather reopen in trading? what happened back on january 3rd was professional traders were able to see the ticks. they were able to see the action in these securities, using these specialized market data services. that is so key when these securities reopen. we saw this happen. this is not unprecedented. there was a temporary freeze on january 3rd that started around 1:42 in the afternoon and lasted for about the time we're talking about now. this freeze, this freeze is longer right now. so that is so key. i would love to get charles payne's and dennis, charlie, what will happen when the securities reopen. cheryl: charles payne is next to us. charles? >> i'm not worried about larger names, smith & wesson, it is a name we all know but not heavily traded and like

intel and microsoft. price discovery is the most important for the exchanges. people meet to buy something and someone else is there to sell it. it puts us together, when you interfear with that you get crazy distortions. i'm wondering about the pr angle, guys. what happens when people saw a stock maybe earlier today at 30 bucks, maybe it was executed at 27, that kind of a thing. maybe we have more of an uproar. dennis: we have a new guest. he is an analyst of the exchanges from "morningstar". gaston, i imagine techies at nasdaq are in utter terror. only people happy plaintiff lawyers are already preparing lawsuits because some people couldn't trade their stocks. >> i think i'm still at at point where we're still trying to get a lot of information to find out exactly what happened ha. so i don't really want to rush to judgment quickly here. i want to say unfortunately as some of your guests pointed out earlier in your segment, feels like this

sort of thing is happening with, you know, a fair amount of regularity at different market centers. we had the bats issue with the ipo. nasdaq had a facebook issue. cboe, options exchange earlier in chicago this year. the reasons for all these might be different, i think perhaps the common thread the exchanges do seem to have challenges in managing through technical issues. as an analyst, that obviously you would like to see that corrected. dennis: given the spate it seems like market unusual and unplanned outages and event and that big bunge jump, are we inviting intervention by government officials, sec, saying hey, if you guys don't clean up your act we'll force you to. >> there are parties in the market that would like the sec or regulators in general to intervene and kind of maybe, make some changes to the market structure. i would caution though that's process that moves relatively slowly. people generally have been

clam moring for a long time of different changes in market structure for various reasons with regards to the roles of dark pools or off exchange trading whatnot, so even though people might want to step in that is a process that takes awhile. i wouldn't hold out for that to happen right away. regulators are usely thoughtful and methodical how they do these things. cheryl: thank you for your comments. we appreciate your time. we want to go to washington. our correspondent rich edson is working phones in deceit i. i understand you just talked to treasury, rich. >> a treasury official tells fox business and treasury secretary jack lew will be updated and giving remarks at at&t. we'll see if we have updates there. the sec saying they're monitoring the situation and in close contact with the exchanges. on top of that a fbi spokesman for the new york field office tells fbn they are aware of an issue with

the nasdaq but have no further comment. what you typically get from government officials, they're monitoring the situation, that's what we're getting now. cheryl: i know you're working phones. get away from the camera. rich edson, thanks so much. i want to bring back in todd schoenberger. there is something you touched on earlier, charles payne said as well, lack of faith in markets. on days like today, whether it's a freeze, a flash, a halt, whatever, todd this is a problem when it comes to trading on major averages and technology maybe not supporting our markets today. >> you're right about that. keep in mind, you have 60% of the americans right now that are invested in the market. could be through a four owe unone k or -- 401(k) or directly through a pension. you have that many americans are impacted. look at all issues traded on the nasdaq. this actually does impact not just the high frequency trader or the hedge fund trader but really goes down to middle america, to the retail investor. that is when you have any

type of hiccup like this, just another black eye for wall street. dennis: i always believed you got to hype when you type but let me emphasize, guys, while we've had market outage for half hour or hour, overall stock investing it is supposed to be one of the long term things. you don't have to worry about as up to the minute, although you should when it comes to watching us. let's go to nicole petallides at new york stock exchange, who has another proponent of the human touch. nicole? >> yes, i'm here. you know what i'm doing? look at that, i didn't even know what i was on. i read and talk to traders and caught me in the middle of it. in this case i'm looking at headlines ben willis and i were talking about albert freed and company, bats and direct edge disabled trading in all the nasdaq listings and joining the new york city. what do you make of that? >> it is severe impact to the nasdaq and reputation to maintain an orderly market. the fact the matter, there

are some venues, nasd tape, i don't want to get too into it, customer of bank of switzerland or they can facilitate your trading just not with the liquidity normally afford ad customer when the entire market is open. so the damage is that the nasdaq, which is supposed to be the premier electronic exchange is faltering. >> so they're able to do trades but not with the same liquidity. can you explain that? if i'm with ubs and i want to trade apple, what does that mean? >> if you're ubs and a good customer says i want to buy a million shares of microsoft the block trader at ubs says i will sell the trade at a certain price and the trade is reported to the d-tape, nasd. it is a print facility. not the normal marketplace. you have the ability to continue to trade but that was one of the functions of bats and direct edge. they're similar exchange. they're more for

institutional type clients. with them shutting down liquidity continues to shrink. >> i have two questions pertaining to that. number one, are you getting the correct price, the best price and number two, is ubs or whatever, houseworking with their best customers, putting themselves on the line to a certain extent? >> yes, they are. it's a risk you take as a market-maker and facilitating good customers rather than turning them away. it is part of the cost of doing business. you hope you're right. you hope you sell a million shares at a price where you might buy them back unchanged or a little cheaper but you don't know because you don't have all the market data flow coming in to you to know where the supply-demand is. >> talk about the reputation of the nasdaq. this is yet another flaw, right? i mean that's a good way to say it. reminiscent what we saw of the facebook ipo. >> it is reminiscent and the fact right now they don't appear they don't know what's going on. markets hate uncertainty.

investors hate uncertainty. if you don't know what's going on, once we find out the problem, we never really found out the problem with the facebook situation is what it comes down to. so we're not sure what will happen here. >> ben willis, thank you. as we noted earlier intel, cisco, microsoft, three dow components each weighted 1% on the dow jones industrials will also be factored in when those are traded as well. cheryl: nicole petallides on floor of the new york stock exchange. i do want to let our viewers at home if you're joining fox business, breaking news we're covering hour and a half ago, 12:14 p.m. eastern time the nasdaq halted all trading of stocks listed on the nasdaq. why do you care? this is the second largest exchange in this country. a 3200 companies trade on the nasdaq. not just u.s.-based companies but companies from around the world. the nasdaq heavily weighted in technology. also heavily weighted when it comes to foreign companies. china, israel, all of these stocks halted on the nasdaq

as of 12:14 p.m. i want to let viewers know we're waiting on comment from the nasdaq. we have not to then any. stocks are still halted. all the bureaus including sec in washington and treasury all those bureaus and departments in the government are monitoring what has happened. let's bring in christopher naje. he is joining us a former trader as well. christopher, you're president of a consultancy firm of core trading. what are you thinking, christopher? >> what we're seeing here is really unprecedented in terms of what's going on. so it is not just a nasdaq issue. it has to deal with part of the core infrastructure of the securities marketplace the secure information processor, that is what forced all other exchanges to halt trading as well. this is just the latest in a string of issues that have hit the market recently. in fact earlier this week we had a rampant algorithm from goldman sachs rip through

the marketplace. that create ad lot of bad options trades in the market. this is not a good situation. it is fairly significant. dennis: christopher, and we do appreciate you being here. you used to be the former head of trading for td ameritrade if i have that right. are you surprised at the overall lack of market panic? the dow is up 58 points. it was up as high as 60 before this happened. we're hour and a half into this with no firm explanation what went wrong? >> right, that's a great point. listed trading, on the new york stock exchange and a lot of etf trades that are out there continue to happen as normal. that's why you see the dow indices moving in such a way, in fact moving up since this issue happened. so i think that actually helps calmed some of the fears regarding what's going on. i think people realize it is a technology issue rather than a major news event or something that would drive the markets into panic and

dysfunction. dennis: there are two sets of initials that viewers and investors might want to keep in mind as we try to diagnose the what the problem could be. one is utf and other initial set is sip. utp refers to unlisted trading privileges. this is centralized informal exchange of all the other exchanges to make sure a stock that trades on one exchange reflects the same price on other exchanges. chris, the securities information processor, the sip and maybe this problem falls somewhere in there. did we providing so much liquidity and letting all the different markets link up together electronically, did we create too much complexity? >> that's a great point and that is exactly where the issue lies with what is called the securities information processor. all the exchanges out there actually feed their quotations into this centralized computer if you will, which gets redisseminated into the marketplace. with the collapse of this,

one, it is unprecedented. i can't remember in my 26-year history seeing this. i remember during the crash of '87, the tape or the securities information processor was delayed about four hours. more recently during the flash crash it was delayed about a minute, minute 1/2. so to see a complete halt of the system draw as lot of questions, what caused it? was it an influx of significant quotations? was it hacking in some way that created disruption or was it as simple as the mainframe blowing up? cheryl: christopher nagy, formly of it. did ameritrade. thank you for your insights. go up to the newsroom. elizabeth macdonald is on sources from nasdaq. what are you learning? >> i'm getting e-mails from traders. you guys are absolutely right, cheryl. we're trying to diagnose what the problem is. we're talking about tape c stocks, that of course is all the stocks listed on the nasdaq and small cap stocks

as well the jinlt man caller you just had on is dead on. they're talking about, they're not saying this is the case. they're debating whether or not this equates back to what happened on january 3rd with the consolidated feed of steal securities data that popped up in that consolidated feed. so what we saw back then, this is only a 15 minutes flash freeze on january 3rd. you're talking now an hour and a half. the length of time of this flash freeze does make this unprecedented but what they are talking about the anomalies in pricing of some securities and delays in reporting of trades to the so-called consolidated tape. they're wondering if that is an issue. cheryl: that was something, liz, charles payne was discussing over here a moment ago. that is one much your big concerns is the pricings of all these securities. >> absolutely. it is interesting, nasdaq has come out with three notices already saying you can cancel your trades before the resumption of trading. in other words, once these,

once these prices are rebuilt and trading goes on, if you thought you got 30 bucks, and you got 27. that is on you. anyone out there who is worried about this, they have put some phone numbers out there. if your broker can't figure it out, you need help, that is something you may want to consider canceling a trade before it resumed trading. dennis: there is a chance, guys, the dow will actually go up even higher once the nasdaq trades come in. before the outage over hour and a half ago the nasdaq was higher as a percentage than the dow was meaning tech heavy stocks were doing better and now they're counted out of the dow and exchanges are cooperating, the dow may be up better than 53 points. cheryl: that's a real good point. dennis: go to adam shapiro at the marketsite where fear must reign the land, adam. >> you can imagine fear raining the land. this is facade. not as if you have hundreds of thousands of traders

inside the building behind me in times square. we're speaking to different people trying to figure out as are you the official what happened not only from nasdaq but talking about well, the possibility that somebody might have breached their security. we called cedric layton from the layton security newses. he used to be involved with the nsa and he told us that you absolutely can not overlook the possibility that someone did indeed breach nasdaq security, and then might have brought about some kind of a failure and shutdown. that has not been confirmed by anybody. nasdaq not putting out a statement yet actually what has happened. this is truly an appropriate backdrop because while it looks like there's something going on back there, what's really going on is within the thousands of microchips are really at the root of nasdaq. back to you. cheryl: we should point out you our viewers that all we've been officially told by nasdaq at this point is technical issue. they're working to get the trades up and running. >> regulatory halt.

cheryl: they're telling us, they keep using the word processor. that is the key term we're getting from nasdaq. all we can do at this point is trust them that a technical glitch has occurred. one question to you, adam, we had a guest on earlier talking about incoming trades, large bulk trades coming from likes of goldman sachs, morgan stanley even if it is a an option trade, hased that been addressed yet? has anybody brought that to your attention? >> we have not got that kind of statement as to anything from nasdaq but we know from some people we're talking to, they keep saying when you're trying to figure out who might make money off this kind of halt and who might make money going in. traders themselves as you see from different statements. the traders are trying to figure out what to do. they're at a loss whether they should be canceling trades going in prior to the shutdown. they are as confused as it would appear officials at nasdaq. dennis: all right, adam. let's go to chris nagy, former head of trading for td ameritrade. chris, you know what, i'm

hoping you join me and all but guess and rule out any kind of outside sigher about attack. if you want to mess things up and set off a bomb and get real publicity. you don't do this something sophisticated and arcane where a victim can't figure out what went wrong, do you? >> let's hope that is not the case. more likely scenarios has to deal with, maybe a large influx of messages that came in to that securities information processor rather than nefarious that actually caused this issue. dennis: i can hear that. go ahead. cheryl: we're calling this a flash freeze. when you think of the issue, again i keep bringing up the word processor. that is all nasdaq told us thus far, i mean this doesn't seem to happen very often or does this happen more internally an we don't find out about it because it affects one security, two securities? >> that's a great question. it is very common in the industry for maybe an exchange to have to itsd own

technical glitch. as long as the securities information is processing other exchanges can work around it. that is the not case in this scenario. the main piece and core of the infrastructure has actually gone down. so the other exchanges, even though that they're capable of trading can not trade because of that missing link. cheryl: all right. christopher, thank you very much. we appreciate your commentary on this. dennis kneale. cheryl casone. we'll take a quick break. as of this moment the breaking news, trading on the nasdaq has not resumed. trading halted on the nasdaq 12:14 eastern time. all securities on the nasdaq halted. you're watching continuing coverage. breaking news on fox business. "markets now." we'll be right back right now, 7 years of music is being streamed.

a quarter million tweeters are tweeting. and 900 million dollars are changing hands online. that's why hp built a new kind of server. one that's 80% smaller. uses 89% less energy. and costs 77% less. it's called hp moonshot. and it's giving the internet the room it needs to grow. this&is gonna be big. hp moonshot. it's time to build a better enterprise. together.

i'm, like, totally not down with change. but i had to change to bounce dryer bars. one bar freshens more loads than these two bottles. i am so gonna tell everyone. [ male announcer ] how do you get your bounce? [ woman ] time for change!

dennis: welcome back, everybody. >> tracy byrnes, ashley webster

the nasdaq is still down presumably of a technical glitch. sec and fbi have been notified of this we've been down since 12:14 today. we have team coverage. most important thing i heard, put limit orders on anything. ashley: a lot of confusion. one thing we heard time and again it is a slow day in august and thank goodness for that, that is happening at this stage. there again, what the heck is going on? let's go to cheryl casone with a look at the markets and reaction to what is going on. >> we continue, ashley and tracy, what you see on the screen. that is what happened with the intraday chart. i do want to show you a couple things on the fox business wizard. to give you more of an idea exactly what happened. hear is the intraday chart of the nasdaq. here is what we saw, 12:14

p.m. eastern time that is when all nasdaq traded stocks were halted. trading is fine at chicago cme, trading is fine at the new york stock exchange. but anything nasdaq related, more than 3200 stocks, all the stocks have been halted. if you look at the 12:14 mark, that is what happened with regards to the nasdaq. this is not affecting, i want to say, this is frozen nasdaq, 3631, up 31 points at the time, 12:14. we're at 2:00 p.m. eastern time, pushing two hours. the dow has not been affected. my colleague dennis kneale making a great point in the last hour of "markets now", market trading strong. that was a little bit of a speak on the dow. but the dow is staying strong overall. i want to show you something. this is the s&p. nasdaq trading stocks not just on nasdaq. microsoft, apple, things like that, those stocks being halted but not trading

on the new york stock exchange or again on the cme. there is one other thing i want to show you and give you a section on leaders for the dow. we do have the bigger names but in the dow 30, take a look at microsoft. microsoft, not trading. 2.29 as you can see. taking a look at different names still trading, we are in the green. the dow, the nasdaq, the s&p, we have a nasdaq that is frozen, not moving 631. right now. i want to show you one more thing, featured stocks. let me go back here for a moment looking at sectors, tech-heavy nasdaq if you look at technology names we watch internet names, a lot of names are frozen. google, perfect example. google is frozens, up more than $3 at the time, 12:14 p.m. eastern time, tracy and ash. as we monitor big names like apple, microsoft, google, facebook, we remind ourself what had with the ipo for facebook. a tough day for everyone at

nasdaq. tracy: a little bit of deja vu all over again. ashley: to cheryl's point, is that a sad point, we're becoming so used to these things? tracy: lizzie mack made a great point earlier on january 3rd we had a flash freeze for only 15 minutes. >> that's right. tracy: this is much, much more monumental when markets open again. that's why we have to go to adam shapiro down at nasdaq. adam, what are they saying? are we hearing more detail when this will start and what will happen? >> no, nasdaq has not put out any official statement when trading might resume. think how much is frozen by the flash freeze. you have 2,000 different securities which can't be traded. you heard cheryl talking about apple, google, cisco systems, microsoft. you have what is it, 5.7 trillion for the market cap of securities which are now halted because they can't trade. no official word when trading will resume from nasdaq. we're going into almost two hours since the 12:15 shutdown. the question as to what

happened has not yet been answered. "wall street journal" reported there were problems with the new york stock exchange's electronically traded system but nothing that brought about a flash freeze. about an hour after arca reported problems that is what nasdaq ish shaud what they call the regulatory halt but what we're calling the flash freeze. back to you. tracy: ad am, you're out there and we'll be back to you time and time again this hour. ashley: go to sandra smith at cme. what are you hearing now, sandra? >> that is a story, ashley. if we were talking about the fact it happened two or three years ago we could have seen a much bigger impact in trading here on the trading floor in chicago. the nasdaq futures pit here, we're talking to traders. they did see a spike in volume on the nasdaq futures products during the outage.

certainly something that they're noting is that the nasdaq reached its lows of the session also during that outage. that is a selloff on heavy volume during the outage in the nasdaq futures. that being said, again the talk down here is about the calmness we're seeing in the markets. the cme put out, they issued to fox business network a comment saying there has been no impact on cm e-trading and its products as a result of that outage. important to point that out but, there is certainly calmness on the trading floor. we saw nasdaq futures pull back on the news. they have since recovered showing that there are problems sometimes in these markets and. ashley: doesn't do justice to calling it a glitch now that we're past the almost the two hour mark on this.

tracy: we talked with ben willis earlier. he said you know what? this is why we need human beings beings on the floor. let's not get use to the technical stuff. >> there is so much going on, we spoke to ben will list, john corpina, jason weisberg. one thing we want to see is a slew of halt messages on dow jones for nasdaq listed stocks. you know what this means? this may be the five minute quote only period of halts for these tapes, these securities. which could in fact mean they're going to open the nasdaq. when they said shortly, at 1:21. though didn't mean shortly. because it has been well over 45 minutes. however, the fact that these halts are now crossing the tape could in fact mean we are going to see the nasdaq reopen iminently in the next five or 10 minutes i'm guessing now. this is the time period, if you choose to cancel your orders you need to do so now. nasdaq will not be canceling open orders on the book. instead customers who want

to cancel their orders have to do so prior to the resumption of trading. so we will continue to watch this but the fact that i'm seeing all these halts on these nasdaq stocks indicates that they are on their way to reopening the nasdaq composite index. tracy: nicole, great, great, information. people get on the phones basically with your brokers or sell them or do what you have to do. it may very well reopen and you're stuck with the price as we mentioned earlier. ashley: that is very true. let's go to the phones. let's bring in brian corn, a securities lawyer. thanks for joining us. from a legal point of view what is the nasdaq facing here? we don't know what went wrong but what kind of issues will the exchange face? >> this is interesting to note this is not necessarily a crash-induced halt. this is timing glitch, caused by some force we're not quite sure but there doesn't appear to be a volume-weighted or a large decline going into this halt.

if you go back to the flash crash three years ago, what the sec has done in reaction, how to make orders light -- right, after orders were executed that were clearly erroneous. you had some stocks trading from $40, down to 2 or $3 and rules are in place to how to execute and break those trades but what they haven't really figured out how to prevent the glitch in the first place. that's the real concern here, that you have computers that are so dependent, we are so dependent on these machines to execute all trading in these stocks, especially on nasdaq where there is no human being exchange that we don't even know and it is possible the nasdaq and sec are not even aware why is occurred. ashley: we're talking to brian corn, securities lawyer for pepper, hamilton.

brian, let me ask you this. okay, it is not humans it is all computers but the nasdaq is running an exchange and a lot of money is traded back and forth every day. it is incumbent upon them to get these systems right. >> that is absolutely correct and part of the problem nasdaq has and many of the other trading systems the number of broker-dealers that access their trading civils on a daily basis and minute by minute and even tick by tick basis is so wide that the possibility that that one of them could cause a glitch and insect some sort of a virus is a threat and not a threat most of us have with respect to our internal business systems. they have been a little bit slow in terms of technical rule making, in terms of on the i-t side exactly,000 to control this and part of it is, that you do have program trading out there that, you don't see human beings behind a great number of trades. ashley: very quickly, ipo,

the infamous facebook ipo, the sec fined the nasdaq, what, 10 million dollars for, among other things, poor decisions. could they be opened up to, of course we don't know what this is, but is the possibility of more fines very real here? >> absolutely. i don't see that there will be a lot of investor claims coming out of this because it looks like everything has just been halted. and if you even go back to the flash crash as an analogy, everything recovered quite well at the end of that day. you don't have, this isn't a window where you see a lot of ipos pricing. that was really a big issue with facebook and some of the others is, that people are looking for the big pop and --. ashley: yeah. >> the delay, absolutely killed the opening. i think here, if things get back to normal within a few minutes and it looks like they're trying this five-minute test bid only process that the investor really has to have damages

in order to push a claim. that won't stop the exchange itself from being fined by the sec. ashley: great stuff. brian corn, securities lawyer for pepper hamilton. dennis, did you want to jump in here? >> one thing brian corn pointed out to keep in mind this wasn't like a flash crash where it was caused by plunging prices unexpectedly nor caused by a surge in volume. this instead is a feedback loop problem. reuters quoting sources saying it was dissemination. means the price activity, and actual prices, feeding it backs into the system, there are two things a utp --. tracy: it is important in case the market opens the next five minutes again we remind people if you need to cancel your orders please go do so. because then you are stuck with the price that you get and who noise what kind of legal implications you will get out of that. >> good point. tracy: call, cancel, do what you need to do. >> this is more of a lack of feedback loop and lack of presence, they decided hey, let's halt trading because we can't get accurate enough

price instantly. ashley: right. >> the other thing is. i have a retirement account where i own stocks and etfs and mutual funds. i'm not doing anything to that. this affects most, the very same guys who added to the volatility of markets. affects day traders, high frequency traders have thousands of trades they never execute. these guys are going crazy because 2% of all stocks that trade are on this tape c nasdaq oriented stocks not now trading. so these guys are going crazy. ashley: good point. tracy: lizzie mack is dying to jump in here, right, lizzie? talk to us basically the history of these glitches. >> that's right. it is really curious, by the way i'm hearing from traders on my blackberry, working the phones, they're concerned about putting in any orders at all when this thing reopens. if you don't have the right quotes you can't trade. goldman sachs mission takes on the options -- mistakes on options trade, that programing error could cost them hundreds of millions of

dollars. that this is happening today, almost a year ago, knight capital had a whopping programing error where their algorithms were buying high and selling low. that's where we're at right now. we don't know what caused the problems. we don't know if it was stale securities fed into consolidated information feed. nicole petallides, cited direct enwhich runs stock exchanges, halted trading. direct edge halted trading january 3rd with the temporary flash freeze which was a fraction of the time that is happening now. watch out for the open. it will bb a slippery, rocky ride once this thing reopens as nicole is saying may happen. we don't know yet. that's where we're at right now. tracy: lizzie mack, thank you so much. you know we will be back it you, girl. >> sure. tracy: joining with us with more, david lutz a trader for stifel-nicolaus out of baltimore. dennis kneale, he has 401(k),

he is not doing anything but you have people that are making serious trades, don't you? >> yes, we noticed since the nasdaq halt went into place everybody was saying will this be a short term issue or possibly a longer term issue? as minutes dragged on which started seeing sellers of etfs on the new york stock exchange but underlying securities are nasdaq stocks. good example, iwm, russell 2,000 had a lot of nasdaq related issues. didn't look like predatory selling from the hedge fund community. it was a slight hedge just because with the market locked up there is uncertainty in the air. no one was quite sure what is going to happen. i think it is important for your viewers to understand, we're sitting here and watching futures on the nasdaq market and nasdaq e-minis a little more liquid than futures, they're sitting trading right where they ended up being halted

an hour and 0 mints ago at this time. doesn't feel like there is any precipitous decline that's occurring. s&p e-minies resting on their highs. not feels like there will be any kind of wild volatility occurring once nasdaq does reopen. but as you had noted before, i think it is very important for any of your viewers out there that might have orders that are in algo, specifically a vwop-algo. weighted price over the day which is common strategy, if you don't cancel orders and reenter them once nasdaq goes to opening five-minute window they're giving everybody time to prepare. what could happen the algo will try to make up for all the volume while the market has been halted. if you're in ill lick quick -- illiquid stock trying to buy something you could dislocate the price to the upside. we're spending a lot of time talking to our clients and

making sure everybody is very understanding what the market will be doing when they reopen and what the process will be and specifically orders they might have out there in system it is really wise if you cancel those right now until we understand what the playing field looks like. tracy: david lutz, stifel-nicolaus. real interesting stuff. to your point, algorithms could be a part of the problem we're seeing. thanks for joining us. >> thanks for having me. ashley: let's take a break now. we're coming up two hours since trading was halted on the nasdaq, right around 1 -- right around 20 past 12 approximately. this is unprecedented. emac, liz macdonald, was telling us we had a similar problem in nasdaq january. lasted 15 minutes. we don't exactly know what is going on. we're waiting to hear from the nasdaq when trading may reopen. let's take a break and we'll be right back with the very latest my mantra?

trust your instincts to make the call. to treat my low testosterone, my doctor and i went with axiron, the only underarm low t treatment. axiron can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who mayecome pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children

or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased d blood cell count, headache, diarrhea, vomiting, and increase in psa. ask your doctor about the only underarm low t treatment, axiron.

we replaced people with a machine.r, what? customers didn't like it. so why do banks do it? hello? hello?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello? ally bank. your money needs an ally.

ashley: welcome back, everybody. we've been following remarkable developments on the nasdaq. essentially all trading halted now, coming up on two hours. we can tell you the source at the nasdaq told fox business network apparently trading will attempt to regan at 3:00 p.m. eastern. so in about 0 minutes from now. so but we are coming up to

the -- 4 minutes from now. tracy: if you go to the website now, it is not even in big bold letters at the top like you think it would be. it is approximately the third story down? ashley: third story down. tracy: u.s. stocks up. nasdaq listed trade halted. did i read that up? ashley: fairly small print as well. tracy: wow --. ashley: buried the lead. tracy: to say the least. dear god. let's bring in michael jones, chairman and chief investment officer at riverfront investment group. i got to be believe this is the lead story in your office right now. >> without question. i don't think we talked about much else since trading was halted. but, i do think, it is important to note that, there's a lost markets that are still hope and trading. tracy: right. >> everyone of them continue to trade higher. so, the message you're getting from all the open markets and especially the bond market. that is where people go when they panic.

the bond market continues to sell off today. so that suggests no one's panicking. this i guess is just a technical glitch we will have to keep getting used to. tracy: you know, interesting, that the market is just so calm. i think most of us at home with 401(k)s are probably, well, dialing you up, saying do i have to worry about this, not really doing anything at the end of the day. are you getting clients calling in a panic? >> not really. i think it is because so many other, unlike the flash crash, unlike some other glitches that we've had, some of your other reporters have accurately said we're starting to get used to this. in a world dominated by computers there will be bugs, there will be errors and there will be trading halts. that doesn't necessarily have longer term implications for market pricing. tracy: i think you're right. maybe it's a good thing we know it eventually will get worked out. i talked to a, gentleman who manages a lot of money,

wealth manager earlier and i said he would go out for lunch. they know, at some point it will be fixed and we'll move on and everything will be settled and why bother with the nitty-gritty? >> the other thing, we're fairly deeply involved in etfs and have been a pioneer for the last 10 years and one of the things you worry about immediately in this kind of a situation is, what about the tech heavy etfs that depend on nasdaq for liquidity? we've been keeping careful eye on that. we continue to make markets. i'm sure the depth is not what it would be if the nasdaq was open. the fact they're continuing to trade, bid offers are reasonable. this suggests everybody is taking this in stride. tracy: interesting, charles payne brought this up earlier about the confidence of those on the sidelines. we all know they're not all back yet. they're all waiting for the right time.

does this push it off that much more? >> i hope not. one of the things that really bothers me in the recent selloff in the bond market, is that there's been huge redemptions out of bonds and all going into cash rather than into the equity markets. tracy: yeah. >> essentially what investors are doing is, they're taking away the risk of sudden loss in the bond market and accepting the certainty of long-term risks, losses relative to inflation in cash. they have got to get this money invested if they're going to meet their ultimate investment goals. tracy: michael jones, chairman, chief investment officer, riverfront investment group in richmond. thanks for taking time on this crazy day, sir. >> my pleasure. ashley: joining us by phone, homan jenkins, editorial board member of "wall street journal." thanks for jumping in here, what is a quite remarkable day. yes, the markets are calm but what does it do for

investor confidence in the whole trading setup when we see a major, change shut down more than two hours? >> that is interesting to see, when the exchange reopens, if they reopen as they say they will, 3:00. if there's a lot of selling because nobody wants to be part of this system going into the weekend, then that is really going to reach the average investor. otherwise, the people who are really hurt are people who trade 1,000 times a minute. not people who trade once or twice a week. average investors are looking this wall street craziness as usual but doesn't really touch them. we'll see what happens when these stocks open up again. ashley: how much of a black eye for nasdaq is this, homan? >> i don't know how they can keep getting these black eyes. it is time for someone to realize the business model is not working in the u.s. exchange sector because we have too many of these problems, the business model has become too complicated t really must annoy companies who want to list shares on these exchange because they want investors very have ready access to buy and sell

at a reasonable and trustworthy price. i'm surprised corporate america is putting up with it. >> homan jenkins, dennis kneale, if i can hone in and there is no bigger fan of "the wall street journal" editorial page and i hate to disagree with anything but before we throw up that they screwed up everything, they facilitated trading of billions upon billions of shares every single day. you have 13 different exchanges have to talk to each other and 0 huge dark pools talking back and forth to all each other. the surprise or thing to striking this happens so rarely. this is not simple stuff. most days we don't have anything close to this happening. >> you put your finger on the source of the complexity which is we have a regulatory system that requires them to interconnect and to show their prices to each other and trade with each other. you could imagine a different system in which each exchange kept the stock that it had listed and those

stocks only exchange traded there and you wouldn't have all the complexity. i think that is the business model the exchanges would choose for themselves if they weren't under sec mandate to behave the way they do. ashley: that's interesting. the question is, dennis, though, is once too many times? when you're talking about people's money and faith in the system, that you're saying there is so much information they're bound to have hiccups? >> couple points. nothing is ever flawless especially with tech. second of all we have not had a flash crash, not losing hundreds of points. tracy: we don't know that yet. we don't know that get. >> the people who should be in for the long term, anyway, guys. what happens over an hour or too simply doesn't make any difference over the long term. tracy: you've been sitting on set telling people for how many months they have to get back in because things, we've seen great earnings and -- >> that's right. this is no reason not to get back in. charles payne would agree with me. ashley: weigh in on this. >> i will say that, listen

the public is afraid and this does not give them the sort of confidence. ashley: exactly. >> endid necessary it is right, if you were on vacation and didn't know about this, probably won't change anything other than the fact you know about it, but it can't keep happening with this amount of frequency. ashley: that's my point. >> i know it is technology and have a problem, if you have a car that breaks down too frequently you will junk it and get rid of it but we won't go back to horse and buggy. >> one reason the traders are so calm, every day their microsoft windows system bugs up and freezes they have to repeat which is technology. tracy: you know too much. ashley: you know what i would say? i think, and the last guy brought this up. i think you will see more pressure on professionals, guys that get in front of trades, high frequency guys. this will be a bottleneck issue. you kind of talked about the loop, dennis. it is a question of fairness. does goldman sachs, cr trades, all pent-up trades and will wall street see

penalty-up trades to figure out a way to get ahead of things? tracy: right. >> that is where people have a problem with the system. they don't have problem owning with gap because they shop once a week. they have problem with guys downtown getting in front of their trades. ashley: of course they are. money normally going into the markets would come out. tracy: david lutz said earlier, they're shorting etfs. >> that's a hedge though. >> people don't even know what that means. we're trying very hard to educate them. >> don't worry about that. does not affect them. tracy: yes, it does. they hear what is happening today. they run deeper into the closet. >> it is a hedge. ashley: it happens, basically. >> basically it happens. if you're balanced portfolio and long range retirement account, you don't need to panic about this. i think you guys are right when you say it is another reason for risk-averse investors to be fraidy cats and not get in. you guys didn't get in when the dow was 6800 in march '09. you're certainly sorry that you didn't. i don't know that this is

not a good reason not to get in now. ashley: it is good to rattle cages. that is how the system gets better. tracy: yes. ashley: we hope. >> the average person out there --. ashley: it has already been rattled. >> we have to say to the system, hey, this is not a good system. there has to be pressure so we don't go through this more frequently. ashley: i want, we got to take a break. thank homan jenkins, probably gone right now, "wall street journal" editorial board. seeing on the screen, limited nasdaq trading to begin at approximately, we couldn't stress more the word approximately, 2:45. a source had told us 3:00 p.m. other reports saying 2:30. we're splitting the difference, around 2:45. exactly what independent limited means we'll find out. it could reassume in 15 minutes. we will keep an eye on that. tracy: as cheryl reported, all the nasdaq stocks on the dow are halted. they're preparing to release them. ashley: at the request of nasdaq too. tracy: totally. ashley: take a break. we'll be right back so don't go anywhere.

[ male announcer ] imagine this cute blob is metamucil.

and this pk is the inside of your body. see, the special psyllium fiber in metamucil actually gels. and that gelling hes to lower some cholesterol. metacil. 3 amazing benefits in 1 super fiber.

♪ tracy: will come back. covering breaking news. almost two hours. the nasdaq was halted. over two hours now. no trading thus far. we are hearing is that limited trading will begin again at 2:45 p.m. i presume there will test some stocks before they go with the entire nasdaq. potential limited trading. although we should go back down to the nasdaq right now. adam shapiro knows better than i. what's going on. >> reporter: a, tracy. to 30:00 p.m., they started that kind of trust -- test trading. there will release securities that have been frozen during the five trees.

that will take place if all goes according to plan 15 minutes later at 310. the nasdaq will begin trading as we understand it. that is according to the nasdaq. again, as you heard from nicole petallides, anybody who wishes to cancel their orders niece to do that before the resumption of trading. make sure the system is up and running. there will release securities. tracy: again, to reiterate you have to cancel, canceled. ashley: do it now. approximately ten minutes. we should have some limited trading back and the nasdaq. the spillover. >> reporter: as you take a look at the big names that you follow that trade on the nasdaq,

bringing up a great point earlier. the institutional money. the institutional trades are going to be the real trick here. this will be in your retirement, your portfolio. a lot of the names that we saw, internet names of the nasdaq. the prices, want to give you a sense. when you see the stocks move you can see that these are the prices you're going to have, whether you want to put in new orders will certainly be up to you. but as you look at amazon, some of the big names, as you can see, this is real-time technology. we follow the nasdaq here like we do the s&p in the dow. 28883 was the last trade that was processed on amazon. open orders. those will be cancelled. want to reiterate that point. take a look at ebay, the stock, 5120.

as you can see, this has a little bit of action you're going to watch one of the biggest weighted stocks on nasdaq. again, as you can see, a 72. a year. ashley: stock the never well. i wanted to give our viewers the sense of the prices that we have on the books as of now. whether it's limited orders or open orders. that will be a question. certainly there are brokers all across america and the world-renowned and having to make those "decisions. ashley: is seen sure some of the headlines, there will be a staggered opening. 325 eastern, 15 to , all option glasses. before that there will be a slow

rollout. tracy: we have to go back down to washington d.c. following the angle from down there. there was an sec conference call. >> reporter: that the sec and market officials convened a conference call as soon as the outage had happened. the conference call continued as the nasdaq tried to figure out this problem. this also when you consider what treasury is doing right now. treasury message -- official tells us secretary lynn has been briefed and is being updated. the chair of the financial stability oversight council it creates this board of a number of different regulators. on the west coast and silicon valley schedule to speak about an hour-and-a-half. the fbi field office in new york tells fbi that they are aware of the issue but have no other comments. the top of this one, u.s. market

officials in the sec convening a conference call as soon as this happened and stayed on that call as the nasdaq work to fix the problem according to the sec first reported by the journal. ashley: all right. rich edson with the washington angle. let's bring in liz claman u.s. been working the phones feverishly. what have they been telling you? tracy: nasdaq listed ceos, companies whose stocks listed on the nasdaq. investor relations offices, and interestingly enough is ready to go on the record about this. they're confused. they have not gotten an average. some of them have not gotten any average from the nasdaq. host of new we are in contact. here is what they're telling me. some of the emotions ranging from annoyed to surprised to concerned. the ones who are north of the wasser recently came out. came out recently with a very good earnings. the stock has been doing extraordinarily well. the whole thing.

do you know what that could possibly mean for the market cap? a great day of trade. these things go into an entire sort of spin and it is not a good thing. i talked to another ceo who says we need to know what this is. it's disconcerting, especially considering without a lot of cyber security issues. they want to know about that. when i pulled out of an investor meeting. he said to me, this is the first i'm hearing about it and i don't have anything from the nasdaq, blackberry, smart phone. let me call you back. they are concerned. 3,006 number so. a lot of these are very high tech names. but then there are the smaller names, finance our energy. everyone is affected equally, especially the ones, as i mentioned, and register my with good earnings. ashley: interesting that some of not even been notified of it. criticism for this not coming forward.

desperately busy trying to find what's going on. two hours and nearly 20 minutes into this. tracy: keep in mind, some of the nasdaq best and brightest are on vacation. i have been trying to reach some of my sources, and that is also an issue which i find the north, a very interesting. >> and there were your stock is doing well. tracy: working the phones for us as always. joining us now, former nasdaq vice-chairman. clearly no one better to talk to the new about this. have we gone too far? the pendulum to machines. is this just another tale of the story? >> i think there's no question that when you are so dominated by computer systems that it's hard to a disseminate information.

traders talk to traders on the buy and the sell side. the have specialists on the floor of the new york stock exchange. it certainly i think would help people into a little bit of comfort, but keep in mind, the crash of '87 was no picnic. we had a lot of trades that did not cross. people didn't take telephone calls. so it's sort of like they both have their own set of problems. tracy: david, you just heard liz claman talking about how ceos of not even notified were told what the plan is. what is the public relations angle? it has not been great. >> right. i actually think on russell rebalancing day that traders are got knocked out from the market. the stocks went wild in many

instances of the market and down. printed at levels that there should not printed at. that was a much bigger problem that i think what you were probably going to have today assuming they get the stock market opened. this is not a russell rebalancing day. so they're lucky in that respect. they have a pretty column c as these things go. tracy: and they're lucky that there are a lot of people on vacation, so there is no volume. before i let you go, do we need to reevaluate the system, reevaluate the way we're doing things, this move to technology? do we bring the specialist. [inaudible conversations] >> we have to constantly reevaluate, but the dictate, messages in the five years before that dot com bubble back in the early 1990's to my this country was to 500 ipo per year which was creating tons and tons of jobs for the u.s. economy. since we started to go to an electronic stock market we have

been doing about 100, one of the 35 per year. if you think that the stock markets are ultimately supposed to serve the needs of the economy, it's pretty clear that the stock market's have not been doing that. we have to get back to basics. tracy: amen. former nasdaq vice-chairman. thank you. i'm harking back to the 90's. ashley: nostalgically. tracy: good times. ashley: just a couple of minutes away. perhaps limited trading beginning again on the nasdaq. let's send it upstairs to elizabeth mccotter has been working the phones since this happened. >> the nasdaq traders have been e-mailing me. they're saying that what they're hearing from nasdaq is computer errors. malfunctioning software that feeds the data between the stages. at intermission got into what is called the securities information processor. this is the feed that disseminates.

the all started -- the problem start around 1214. the electronic trading platform started to cancel orders because it's problematic. and so there rerouting those trades away. then young to started to go down in trading by about a dollar. intel started to swing about $0.20 either wait. so that is when the officials said wait a second. there may be a computer malfunction. just two days ago goldman had an internal computer malfunction where the computer they're bombarded the options exchanges with erroneous option trades. so the fact that this is happening to two days after that, the fact that this is happening about a year ago after it the average maturity problem and also the facebook ipo flop, i'm telling you something, these traders i'm saying this is really does it doing electronic

trading. they're not so confident about what happens when the securities reopen as they may happen. they're wondering. what do we do for institutional investors our customers? did we put in the orders in at the open or do we wait and our? do we wait half-hour? that's the debate. it could be a slippery slide when the securities reopen as we have been reporting throughout the day. out give it back to you. ashley: thank you. you can see the bottom of this green chemical in with test trading at the nasdaq set to begin right about now . full trading to resume at 310 eastern time. we will keep an eye on that and see what updates we get. trying to get back on track. to your point, dennis, earlier about high-frequency trading and the mass of the permission that comes in. that's the way the system works. that enables the system to function as such a high level. >> some say it provides more

volatility. others say it provides some much extra liquidity. i just got a text from a wealth management types of watches the markets allow west. high-frequency trader, trading affects basically 28 percent of all the stocks traded on this. the nasdaq ask all the other exchanges not to trade them. the high-frequency guys you have not been able to trade. they're loading up and getting ready for the resumption of trading. what will that do to the volatility? this will be a test case. it might turn out there is less impact. one other point, i love that we are beginning to up look broader, debate whether we need to give market makers back in there. we're so far passed that point. the global markets, the billions of shares that trade every day. we have no choice but to rely on computers. tracy: i don't know. nicole petallides is on the floor of the new york stock exchange.

>> uptick the debate on by using something from someone on wall street. dissing to incorporate technology along with the human being who obviously can be here to talk about different technical glitches. why doesn't the nasdaq have a platform that a similar to that of the new york stock exchange which comprises the electronic trading and human being trading. so in the old school form to a certain extent. that is something that we watch. someone like ben willis talk about the nasdaq today. their reputation becomes once again. that was a complete debacle. so this is with the issue really is the new york stock exchange and nasdaq of all halted trading .

just the fact that everybody had to do that is not good. the other thing, i trader used to work here. where it is the backup system? how come everyone is so critical of the new york stock exchange when something happens about weather now we have a backup. where is the backup for the nasdaq? outcome would just tear technical glitch. the further detail on all of this. ashley: all right. trading under way now. we will take a break and be right back. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daillive webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade.

all your imptant legal matters in just minutes. protect youramily... and launch your dreams. at legalzoom.com we put the lawn your side.

♪ tracy: welcome back. we are waiting still for trading to begin on the nasdaq. at this point it will begin at any moment. full trading at 3:10 p.m.

ashley: two and a half hours. tracy: a very fluid. of course we will keep you posted on all of this. right now we will go of to elizabeth macdonald. ashley: sandra smith. tracy: i get to say welcome back. congratulations. >> i'm here. and it appears that this market -- i mean, breaking news. my first day back. if you're looking at the fear index, it's actually down a full point right now. just talking to traders saying we have been talking about how that has been a sense of calm amidst this entire debacle over the nasdaq. sitting near highs of the session. nasdaq futures trader at year. reelected the chart. there was certainly a dead. it came right back. really the take away is that traders in general, the investment community is more apt to handle this kind of thing right now.

they don't get so spooked as they did several years ago. that is certainly something that everyone is talking about the trading floor. look of stocks tt are up, you still have that 10-year yield sitting right near 3 percent for the first time in a couple of years after the big day yesterday. still a lot going on. traders are certainly, in the wake of everything happening over the nasdaq. thank you for the welcome back. it's nice to be back. tracy: great to see you. ashley: good to see you. tracy: especially on a day like today. you know, we said consistently have traded is this the middle of august. something like this happens. the volume is low. there's no great time for this to happen. what about the confidence in the system itself? there will be a lot of questions. >> trying to come up with a couple of broad thoughts. we know the markets hate uncertainty. i think the shop today is that the markets were not more unnerved by incredible uncertainty would post a

30 percent of your stocks cannot trade. a couple of key issues. one will be a case study for crisis management. did nasdaq to a pitch out? bill come out and say we don't know. we are clueless. we are -- it should have been out much earlier. the other thing, the regulations requiring. requiring all these guys to work together. that adds complexity which might have contributed to this problem. tracy: and many ceos, stocks to trade on the nasdaq, annoyed. and i would highlight that and capitalize it. headed down to adam again down at the nasdaq. give us the current update. >> the current update is that trading will resume at 3:25 p.m. still awaiting the results of the test. they're conducting test trades. nasdaq now saying 3:25 p.m.

it will try to resume trading. tracy: thank you very much. we will see you in the next hour ashley: more than two and a half hours since trading was halted. stick with our coverage. liz will pick it up from year with about 25, 30 minutes before full trading is set to begin. will it happen? stick with less. we will be right back. you know throughout history,

folks have suffered from frequent heartburn. butetting heartburn and then treating day after day is a thing of the past. block the acid with prilosec o, and don't geteartburn in the first place. [ male announcer ] one pill each morning 24 hours. zero heartburn.

liz: id afternoon. i'm liz claman. this is a special edition of "countdown to the closing bell". over five and a half trillion dollars is the estimated combined market cap of all the nasdaq stocks that have been halted today. the stock. still stuck because of today's extraordinary glitch that is being called off last three -- /

freeze. since trading went down until 14:00 p.m. eastern time the nasdaq has been trying to get back up and running. full trading is expected to resume in about 26 minutes. 3:25 p.m. here is what we know, the nasdaq effectively froze. all nasdaq traded stocks stopped trading which happened just before 12:20 p.m. eastern time. nasdaq immediately went into crisis mode looking into what went wrong. still no official word on what the problem is. the securities and exchange commission is investigating. fox business has confirmed that the fbi is aware of the situation, and you can bet the ceos of nasdaq listed stocks along with shareholders want to know exactly what happened and whether their portfolios and stocks are safe. full team coverage right now. adam shapiro right down the street at 43rd and seventh avenue outside of the nasdaq in times square. we have rich edson in washington

d.c. charlie gasparino here in our new york studios rias been working the phones and talking resources. and nicole petallides along with the traders on the floor of the new york stock exchange where of course trading has not been interrupted. that is a totally different exchange. we have sanders met on the floor of the cme which is huge volumes and electronic trading. adam shapiro, we begin with you. when will the testing began? >> the testing started at 230, but we don't have any inclination from nasdaq. it will not make a statement even though their pr people right on the other side of the door. the law say how that's going. they originally hoped to have trading resumed at 2200 they're not going to make that deadline. they have not pushed it back, as you pointed out, to 3:25 p.m. no word on how the trade has been going.