cyberattack. liz: they sure came out quickly on that. [closing bell ringing]. why did they know? they had i.t. guys fiddling with the system this morning. here come the bells, david, on wall street. with just a few seconds left of trade. you will see a little bit of a backlog when it comes to settling trades. considering in historic move, new york stock exchange had to shut down the entire floor operation for 3 1/2 hours, david. david: liz, earlier today, we weren't sure there would be any closing bells at nyse but they were ringing. there they were. on nasdaq on this unprecedented day we had closing bells. a little bit of trading on nyse. despite major glitch other exchanges remained open, including those connected on nyse. this is where major averages are ending the day. dow jones industrials are stuck at about 250. a little more. 260, as settles again, to the downside.

all indices. this glitch on the nyse happened on a terrible trading day. began that day earlier, with the chinese index down at one point about 8%. it recovered a little bit but still ending down over 5%. that sent shivers into the markets. still shivering what is happening in europe and greece. that led to a down move. even though the glitches turned in, even though we had glitches in the nyse we still saw trading and downward movement. it wasn't this far down. it traded well under that 200 point mark. it was trading 170, 160 to the downside. but downward trend continued through the day after the trading day reopened. the big question is, what happens tomorrow? we had at least three major networks that were down today,n grounding united airlines flights. that happened this morning. taking down "the wall street journal"'s website. then, of course came the biggie,

the new york stock exchange, grinding to a halt at about 11:30 a.m. eastern time with floor traders scrambling, scratching their heads, wondering what was going on. the new york stock exchange finally reopening, just less than an hour ago on time, as they said. nyse is ruling out a cyberattack as we said. you will hear from experts who believe all of this is more than just a coincidence. my colleague liz claman is the at new york stock exchange. liz, you have nicole petallides down there the whole time. she has been reporting this from the floor all day doing a stupendous job. go ahead. liz: i do. i was talking to a trader over there. here is comes nicole, trader went all good, all good like that. >> all good. some of the volume in the back half hour of 3:30 to 4:00 because of s&p rebalance. when they first reopened the stock at 3:10 everybody was nervous how it would go, extremely light. looking at the book and waiting for some action. then they started to come in.

so this last half hour or so, it was very normal as the guys would describe it, liz. so we ended up a day on wall street that will go down in history. we talked about our seven years at fox. i remember the "flash crash." i remember dow 10,000. down here a lifetime. this is one of those days that really goes down in history, liz. you saul at stocks fall here on the floor of the stock exchange. liz: trades. you had 700,000 open trades at 11:31. all of those had to actually be stopped and they all had to be canceled at about 20,000 at a time. >> less than that. i think fewer than that they were doing them canceling. liz: they started at 120. then art cashin told me took about 20,000. finally got up to 20,000. >> unbelievable. they managed to do that in about an hour or some it took less time than i thought it would.

it came to reloading and restacking and question to reopen. traders felt frustrated not knowing exactly what was going on. they were waiting for management. finally came to few is, it was closed. liz: here comes to fruition, alcoa numbers about, adam shapiro, how did they do? >> miss on earnings per share but beat on revenue, liz, 19 cents. they were expecting revenue of 9.5 billion. the street was expecting -- 5.8 billion. liz: 5.8 billion revenue. alcoa known as aluminum company of america is very much, david you know this, very much a proxy for exactly what is happening in big industry. they're in cars now. they're of course been in planes forever but they don't want to just be aluminum. they want to be much more. david: we saw indications that alcoa is going to be bad because of another metal. we're talking about copper.

copper was way down. another metal involved in industrial production. copper has been down and alcoa was down about 5%. it looks like it is about flat after-hours as adam said. it's a mixed picture. up in revenues, a beat on revenues but miss on earnings per share. this will start earnings season. big question now what happens with this earnings season. we have a couple of traders. i think we can bring them in now with us to talk about some of this. we have james frischling, chad morganlander and mr. charlie gasparino is here who has been doing yeoman's work all day today. he is hot under the collar. what do you think about this? bad start of earnings season. they're not a member of the dow jones anymore. >> this kicks off earnings season. people are not surprised, actually maybe happy to see a mixed report because given the demand side of the equation, you mentioned other metals, demand side has been falling. poo were expecting alcoa not to

deliver on that front. they tried to diversify their business. liz mentioned arrow, autos. that is diversification play starting to take shape. it is not working out yet. they were not expecting much winds there. david: talking about anybody vulnerable what is happening overseas partiularly in china it has to be aluminum. >> did you steel metals have been taking it on the chin. we expect more pressure as you see deceleration in china. demand curve is a bit lower, doesn't mean it is negative. producers, liz is still there, right? liz: i'm right here. david: put up the vix if you can. the volatility index was about 20. after the market reopened at 10 after 3:00 we saw it recover a little bit. it came back. it was down to about 18. liz, right into the end of the trading day it began to climb again and it ended the day well over 21% to the plus side. now you and i have covered this for some years. we know that it's a very

volatile index in and of itself. the fact that it got worse as the trading day went on or restarted, is not a good sign for tomorrow, is it it? liz: well, yeah. looking at it intraday, david, i see a 19 print, is that correct? david: it ended the day up 21, 21.9, almost 22%. again when the volatility index goes up that is bad for stocks. liz? liz: anything above 18, you're looking at certain levels and these are all numbers but it is our job to make it really understandable for the viewer that shows there was a lot of fear. couple days ago it was 16 to continue to see that to climb. you can pile in, chad, if you're there. everything happening in china. that adds fear. greek situation. there is no new clarity on that one despite the greeks put forward a new letter in essence that said nothing. they just want more money. that is a surprise and what happened at nyse.

how did you read it as guidance for buying and selling every day. >> it is uncertainty. you have uncertainty with china. that also for markets they will readjust their global growth expectations. when it comes to greece of course we're going to see uncertainty there as well. because until they come out with a deal which we don't believe they will. let's say they do, it will be just a kick the can down the road type of package but over the next 24 months we think greece will leave the eurozone. >> i can't man nyse caused stock market to sell today. >> no. >> let's be clear, we'll look stupid but i know part of tv is to dramatize the events but this had no impact on market today, zero. new york stock exchange traded volume is right at average today, guess what, because instead of trading through specialists, that whole glitch involved specialists people were trading through the new york stock exchange arca, which is electronic venue and traded elsewhere. david: at the risk of shooting

myself in the foot i will argue with you, charlie. >> pull the trigger. david: when all the stuff at nyse began, liz, correct me if i'm wrong the dow was down about 140, 150 points. >> you're wrong. david: it was not down 260 points. >> it was not down 200 points. david: this is the session lows, is it not, 260 points. >> how can you be a attribute -- david: hold on a second, when trading started again. chinese index was down 8% at one point. it came back a little bit but there was a glimmer of hope at the beginning of the trading day. >> just that people got panicked because they couldn't trade through some specialist, who they never traded through usually anyway because they don't do a lot of trading. is absurd. a lot of bad headlines coming out. there is greece. there is china. nobody is tradings, maybe if you own shares -- david: zero effect on markets? >> switzerland, you're both right or you're both wrong, the

fact, nefarious actions, when they thought it was some sort of cyberterrorism -- that is what initially caused concern around our desk. i think china -- david: something we all agree. >> also say the fed by the way people are cooling off on any fed interest rate move. that is little helpful. >> the minute they came out, they came out pretty quick, maybe if you don't want to believe them, everybody doesn't know whether someone tripped on a cable or -- david: there is the issue, charlie, you poo-pooed this, but there is issue of public perception of nyse, hold on a second, liz, how many people say the heck with it, i'm cashing in my chips? frankly a lot of people, even some traders maybe time to goget cash? >> if it did have any impact it would be 50 points on the dow. global mark crow, this is all global macro, uncertainty. derisking of people on the desk, trying to take down their

leverage. >> that's it. >> and maybe, okay, where there is middle ground here people on desks saw this as opening, a reason to take -- they would pull it out anyway. david: liz, you want to get in, please. liz: perception sometimes is reality. it doesn't, matter, charlie you feel, you are correct, i heard teddy weisberg, standing by will give us a scoop in a second, you are correct perhaps maybe it isn't the most crucial point in the global planetary system. >> not -- liz: charlie, let me talk. fact perception is sometimes reality. >> whose perception? liz: why did i get hauled on to fox news today? why did i i need affiliates in los angeles, chicago? because people look at floor of new york stock exchange and it means capital to them. >> complete and total -- david: are you saying investors have nothing to do with the market. liz: it is perception, charlie. >> i would say yes in large

respect. david: you think there is something wrong with that? >> they have been out of the market -- yes. a lot of people scared them, not saying we did but a lot of people scared them qe would actually destroy the economy and destroy the dollar and -- david: you listen to rudy giuliani, he said dick grasso was very afraid all that too. if the head of the nyse is afraid maybe we should too. >> why did people start trading out of stocks in 2008? there was financial collapse and a lot of people bought gold. a lot of retail investors bought gold because they thought fed was printing money would destroy -- at some point there was fear. anybody that knew anything about the market people on these programs that would raise the markets. liz: am i correct? gold was up only five bucks today? i don't think that is any kind of throughout to quality. you. david: gold up only five bucks. >> i'm not saying that today. i'm saying since 2008. and always i'm saying is this. financial press does create some misperceptions.

i think one misperception it is a wonderful studio, television studio the new york stock exchange. it is not the epicenter of capitalism anymore. david: and to charlie's point, clearly, james the fact is there wasn't, nyse wasn't shut down. there were other, there were other venues at the nyse. >> archipelago. david: which is arca. >> this is one of the most unloved rallies all time in part how retail has been left out. bringing it back to china for a second, 85% of the investors are retail. they came in very late. why the market is so volatile. i agree with charlie's point, a lot of fear was sold. there wasn't a lot to be scared of. david: chad? >> think market is somewhat overvalued at this point on global basis. investors should move up the quality spectrum. should avoid news headlines about new york stock exchange and look at global growth. pay your eps attention on that. david: that is a great point chad makes. maybe not wholesale pullback for

market but be some repositioning in the market as a result of that. maybe go into safety stocks, right? liz: you did see a little bit of that. when you look up on the screen, bank of america, there are names at that we can put upare leaders rather than laggards whether s&p 500 or new york stock exchange. there seems to be a him bit of paralysis on behalf of both traders and longer term investors. they want to sit tight. that is not necessarily the dumbest thing to do. sit tight to see some of this shake out. if you're embracing risk type of person there are some better deals. >> liz, our expectations are that high beta stocks over the last 36 months -- >> high beta meaning? >> riskier stocks. companies trading at market cap revenues. david: keep him honest, charlie. let chad finish his point. liz: ted is a trader. what were people buying today?

forget selling. >> i'm not sure what they were buying. i think most of our customers, i heard you say this, sitting on the sidelines. too much uncertainty. greece is like a keg of dynamite. people don't know which way it will go. chances are it will get resolved. this has been boeing on five years. there is a little too much uncertainty. >> did you get program orders that were buy? >> no. >> microsoft, nothing. >> we didn't. microsoft acted better earlier in the day. i don't know how it finished up. balance was pretty ugly. you mentioned gold. gold is up. i don't know why gold is not doing better. doesn't register because if things are as bad as they appear to be you would think people would be piling into gold and they're not doing it. there is a lot of disconnects here which are not standard of what we might expect in markets like this. clearly china is a problem. it's a big problem.

david: hold on. >> if greece falls off the rails we don't know. david: chad, wanted to finish his point. go ahead, chad. >> traders per speck tough to long-term investors perspective. if you are an investor move up the quality spectrum. move into lower beta names, hersheys of the world, abbott labs of the world, walmarts of the world and be somewhat more underinvested as opposed to sticking your chin out at this moment in time. david: okay. thanks, guys. everybody is going to be sticking with us by the way. we have a full house for the full hour. fbi and white house says no malicious activity linked to new york stock exchange. well, stand still, our next guest suspects the trio of events is way to coincidental. joining us retired colonel cedric layton, former nsa deputy training director and pentagon joint staff. was the nyse a little too quick to say there was no

cybersecurity issue here? >> david, i think so, the problem with their statement they may have to change it in the future. we don't know enough to really say whether it was or wasn't a cyberattack but there are so many suspicious coincidences when you have the new york stock exchange being down for three hours and 38 minutes i believe. then you have united before that and, then of course "the wall street journal." so those would be three major icons of american industry that are basically being affected by, you know, some kind of a computer glitch. in most cases when there are three things more than just a coincidence. david: rudy giuliani, former mayor of new york who was here for 9/11 and dealt with dick grasso, head of nyse at the time to secure the markets and to reassure investors that everything was okay, he said we can bring up a sound bite of him. saying essentially, some of the mistakes that were made by nyse officials today in handling this. let's play that sound bite.

>> if you say it is not cyberattack and turns out two days from now it is you're dead. david: do you think somebody could get fired as a result of coming out and saying that? >> oh, i think it is possible. i think the mayor is absolutely right. the way that we're looking at this has to be looked at more or less holistic fashion. you have to think about you will at possibilities. one key thing that we really need to focus on here david, is this. it is very hard to attribute cyber attacks first of all. it is also difficult to make a certain determination that there was in fact a cyberattack unless the hackers are not very good at what they're doing. david: is it possible, colonel, we will never know? >> it is theoretically possible of. but i will say this, forensics have become better to determine whether cyber attacks have actually happened or not. we have a lot of tools in the private sector as well as in the governmental sector that will

allow us to eventually find out what happened here but it may take some time. we may be looking at weeks or months from now before we actually know. david: colonel stay with us. you were around in 9/11, charlie. would dick grasso handled this differently? >> i think so. jeff sprecher handled this horrendously at the new york stock exchange. he is very good guy. his wife is head of public relations i'm not saying she is not qualified but i do have a little problem with that. i will say this, here's the problem. they knew early on it wasn't a cyberattack. they knew it was something internally. they knew for a fact even though all these station, abc, liz brings up fox news. fox business kind of understands this, everybody was covering this like it was the end of the world. they knew it wasn't. they knew the markets were running functionally well. they knew trades were being completed. they knew, more than hatch of their systems were up yet you

didn't hear one statement. why didn't sprecher do that? only thing i could do that he didn't want to get into the nitty-gritty that new york stock exchange just ain't it once was. it is a marginal player at best in terms of executing the buys and sells and, as a market-maker. david: we have to bring back, i have to ask the colonel one more question here. they're giving me a wrap, colonel but we do know the technical glitch that was responsible for this. it began when nyse was trying to fix an issue affecting small number of stocks. they updated some of their software last night. some people suggested if they had a glitch with their software, that wasn't affecting overall market they should have waited until the weekend. you don't change this thing night before a midweek trading day, would you agree with that? >> i would agree with that. kind of a unwritten rule of i.t. professionals do things like that at night or on weekend. do it when least amount of people can be affected by it.

david: colonel layton, thank you very much for being with us. what about that, james? the fact not only as charlie was saying they mess up in the pr way but technically speaking, they didn't seem to follow protocol. if you have a small software glitch, you don't try to fix it the night before a major trading day. you wait until the weekend. >> to charlie's point, the nyse may not be what it was, the fact a lot of businesses operate in silos. a lot of components of businesses of the that might have been a mandate they put in place. might have been deemed minor enough. chance of disruption to be small enough an minor event but it wasn't. charlie's point, the lack of coming out in front that it was a non-event. >> unless you can find a certain stock -- david: the event, sort of like watergate was less after problem than the cover-up. the event was less of a problem than how they handled it. >> dick grasso came out and said because the traders, specialists, they're not called

specialists or special market makers now. they're not really called specialist anymore, because they were out, his point there was one less, i guess part, one less piece of liquidity to the market. he said because of that he saw some individual trades that looked funky. like people didn't bid up or bid down too much. there wasn't that sort of middle ground which up with of their humans -- that is so hard to quantify because the markets really worked. david: charlie, i have to wrap you, i want to ask chad one final question. nyse has 20% of overall volume. >> from 80. david: does it get less than 20%? >> i don't think so. it will be business as usual. >> wasn't trading any way. david: liz, go ahead. liz: i have to tell you very interesting to see early on as soon as everything was halted here on this very floor that the president was briefed, the treasury department was briefed. the sec and the fbi were briefed. let's go to capitol hill right now. blake burman is our correspondent there with that entire reaction.

pretty quick reaction to mobilization, right? >> all across the administration really, liz. white house press secretary josh earnest said president obama wanted briefings throughout the day what was happening with the nyse. the president was briefed by his homeland security advisor lisa monaco and chief of staff denis mcdonough. and was told that fcc was in close contacted with fcc and department of homeland security and treasury department. there wasn't any indications told to the president that there was a malicious attack. earnest was asked this afternoon if the administration made any adjustments to its cyber systems. listen here. >> i can assure you officials even on days when these kinds of questions are not lingering in the air are very vigilant about their need to adapt to an environment in cyberspace that is filled with malicious actors. >> and as you know washington

has had its own issues protecting its computer systems. the latest incident comes after the office of personnel management was hacked earlier this year and white house computer systems were targeted last year which has many asking just how safe our major computer systems that impact millions of americans really are. liz, david. david: blake, it wasn't just the white house. there was some reaction on capitol hill, right? >> there was, david. one analyst said this afternoon the nyse's troubles related to this interruption aren't over. that analyst added do not be surprised going forward if there are not hearings and in the senate and house next couple weeks. senator dianne feinstein pointed to greater computer trend. this is not an oddity. we need to deal with it. this is becoming basically every couple weeks and has to end. congress is out for the majority of august. we'll see if they decide to investigate what happened here and when they might do that david, liz? liz: well i have to say, blake

this is really important. you just made an excellent point. a lot of traders on this floor were telling me what happened to our backup systems that were put into place post 9/11? now every trading floor started to think we have to put in post-9/11 backup systems. todd horowitz at cme there is the old question, could it happen here? i guess it could happen anywhere because it is happening everywhere. >> it certainly can happen anywhere. that's what you see going forward is that you can see these things can happen anywhere at anytime. if you look at overall story, airlines, "wall street journal," new york stock exchange. why can't it be the cme? why can't it be the i.c.e. exchange? you never know what is going on here. but it's a scary thought. i will say this at this point i don't think there was any funny business because the traders would have found out and they would have really trashed this market much further than they when. however it could have been, but as far as traders are concerned, the overall market was not affected by an outside source.

it was more of an internal problem. but again according to what the colonel said, might have been but as far as traders are concerned we see it as normal act of business. it was just an accident or problem that happened and we'll see how it plays out over time. of course that could change tonight, right? we can come back, if china continues to have problems and these other things you could see major collapse if this turns out to be more serious or terrorist attack or cyberattack than we think. david: todd, you basically agree with charlie gasparino, people were making too much of this. on the other hand we did see the vix go up at the end of the day. are you expecting that to hit stocks tomorrow? is that what the vix is telling us today. >> we had a little selling into the close, david. you have a lot of problems, first of all besides the cyberattack we had, a big mess in china. still a lost uncertainty in greece. once again the fed, minutes came out today. they don't really know what they're going to do next. david: right.

>> all these problems, plus the fact of a potential cyberattack, potential terrorist coming into our computer system which could create a major problem. that is uncertainty. david: james shaking his head no. why? >> we agree it was not a cyberattack but i think when you talk about the fear factor, we commented on it earlier this is another notch. this is another event. the event was the nyse did close a couple of hours. >> part of the nyse. >> part of the nyse for a couple hours. it doesn't make people feel better about this market. they lost a lot of their volume. >> that is why sprecher should have came out of and explained it. i think he did investing public a great disservice, part of our thing went down, we'll fick it out. but this other part of thing going on trading through the computer system trading about what it trades today. by the way there are other markets. investing public doesn't have to worry about this. that is what a leader does. dick grasso would have said that

rudy giuliani would have certainly. david: said it on air with neil. even if there is nothing to say you come out and say we nothing to say and answer questions. >> markets to calm down. david: what is that, todd? >> the markets weren't affected. they traded purely. we had normal volume all. you might have had one dip at the close when they shut down the nyse for at 11:30 this morning. but at end of the day markets traded and functioning. everybody got out what they wanted to get out. >> this doesn't rival "flash crash" not even close. >> not even close. >> minor league baseball. >> not even close. not even close. >> nasdaq, nasdaq screw-up, was that a year ago? literally the way that was played out you couldn't trade nasdaq listed stocks because of their pricing mechanism. david: hold on. we were talking earlier about retail investor. i know they're playing a minor role in this market today. we think that is a problem.

nobody is more in touch with retail investor that our friend gary kaltbaum. he is available now to talk about it. what about the retail investor looks what is going on? maybe has a little contempt the way wall street is run anyway based on what happens in these movement, micro movement, microsecond movements which they make billions of dollars. does this put the nail in the coffin for them in terms of stocks? >> i don't think this puts the nail in the coffin. when i went to my email box when this was going on. they weren't believing the government when the government says there wasn't hacking. there is still a lot of distrust what is happening. i do not believe at all anybody has gotten over 2008. believe it or not we're seven years past. david: i agree with that. >> we're seven years out there really affecting people in their minds and money. why people still have cds getting zero, money markets getting zero. frankly at this point i don't

know what it will take to get real trust back. liz: gary, you could look at stocks like abbott labs or pfizer. they give a pretty decent yield, dividend. people say let me go in there to pay to simply wait. what happened to dow 18,000? we're at 17,500 and change, 515. you blink and suddenly this is a little bit scary of a game for some people at this point? >> well, keep in mind we've had a very big run off of massive central bank intervention around the globe. they have printed 15, $20 trillion in order to create a asset bubble moving higher. as i always said, nothing bad happens when the markets are cooperating. when markets stop cooperating all the bad stuff starts bubbling to the top. >> right. >> we're seeing it in china now. look what is going on there. the people running the show there are insane in how they're handling things. they're telling people they can't sell which creates more

panic. >> put you in the gulag when you sell. we had a lot of retail carry the china market further. in the u.s. we're seeing great m&a activity. we're seeing companies using their balance sheet and stock and cash to make acquisition. that doesn't tell me this market is overpriced potentially in such a dangerous space, given corporations are taking actions. >> i respectfully disagree. if you studied bull and bear markets, typically nearer to the tops you see massive m&a activity. you see tons of secondaries, tons of ipos. keep in mind, that is people cashing out and using their high stock price to buy somebody out. i would be a little bit careful about that. i'm not sure that is a positive thing. >> i kind of agree with gary and kind of agree with you. like i'm splitting difference here. 2007 i remember blackstone did an ipo, the private equity firm and bunch of other private players right before you the you know what started to hit.

the dow went to 14,000 by end of 2007. then as you know the crash. david: i just want to ask liz a question. you've been talking to traders here. what happened to china was very scary today. we saw a 8% decline. looked like a market that was really sliding running right headlong into a crash. do traders think that is going to continue tomorrow? >> liz: well it has to -- the fact it is continuing even as the government throws every single tool in the tool belt and the belt into the markets. cut rates. frozen ipos. no ipos. more than a couple disease have been put on ice right now. they said more than 1331 stocks, i lost track, can not trade. people can't sell unless a stock goes up 20%. a bunch of people who got in at very top and borrowed money to buy stocks. they can't even sell stocks they have to pay that margin which they bought.

david: gary kaltbaum wrote to this. i read your piece this morning about china, gary. compel len piece as usual. you write great stuff. >> thank you. david: the fact is, china, as liz was just saying has done what we were doing with qe and fed and all this money printing. what they are doing is so much beyond that in terms of communist social control of economic policy. they have the regulator of their stock market now lending money, talk about conflict of interest, to traders to buy stocks that are tanking. i mean, it is just insanity. looks like it is falling apart. doesn't look like people are buying it this time. >> just remember what happened there affects what happens here. and around the globe. and let me just say this, every move that the chinese government is making right now is scaring the crap out of the market and the people there. it will affect it much worse. i can't tell people -- >> let's break this down for a second. so we're not just making salacious comments. david: sure. >> the chinese market --

david: am i making salacious markets? communist chinese by the way. >> very difficult for me or you to invest directly into the chinese market. it is chinese citizens that will take it on the chin. market was up 100%. now it is up 40% on 12-month basis. with that said, not about the equity markets in china. about their economy. and the economy is over 15% of global gdp. the major exporter and importer the eurozone to china, okay? so you have to take that into consideration. so this is global growth issue. this is not about the chinese stock market or derailing u.s. market. >> have you read any of soros's stuff. >> of course. >> say what you want about his politics he is brilliant guy. where herds start to move. >> thank you. >> inflection point occurs, oh china's market is selling off,

government is intervening and global growth will go down 10%. their growth will go down 10%, start factoring in. people start selling stocks. that is the one thing i worry about here. could this be inflection point? >> i don't know if is that inflection point. i don't even think soros would know that. >> right. >> you're talking to a guy that is underweight equities in particular underweight emerging markets at this point. we believe valuations with stretched. we talk about longer term, equity prices for u.s. stock market 5 1/2%. when it comes to the eurozone we would stay away underweight eurozone. david: we have a lot more to come. liz? liz: either way the chinese make government is slapping a lot of makeup on this pig. it will be ugly when the makeup is wiped off and they pull out if they ever do. charlie is right. you have a lot of intervention propping it up with a nice,

fluffy pillow. see how the things trade on their own two feet. when we come back, major market day from standpoint of headlines from greece to china to flat-out shut down of the new york stock exchange. we'll be right back. stay tuned. ♪ if you're taking multiple medications, does your mouth often feel dry? a dry mouth can be a side effect of many medications. but it can also lead to tooth decay and bad breath. that's why there's biotene, available as an oral rinse, toothpaste, spray or gel. biotene can provide soothing relief and it helps keep your mouth healthy too. remember, while your medication is doing you good, a dry mouth isn't. biotene, for people who suffer from a dry mouth.

david: now to john gordon, he is a new york stock exchange economic historian and seen glitches like this in past. john, originally you expected glitch to be resolved in about an hour. it went on three hours. how unprecedented is this? >> they never had a glitch that lasted this long before. david: does that indicate to you that the severity, despite the fact that overall the volume wasn't hurt in terms of stock exchanges today, there were many other venues that is serious problem that might have long-term effects? >> i would certainly expect them to dig deep into what caused this, to make sure it doesn't

happen again. i mean apparently it was a glitch and not a cyberattack, thank heavens. david: we have been spending a lot of time talking about the event and then the the way nyse officials and management handled the event. i think we disposed issue of event. perhaps there was technical glitch. there may be cybersecurity but that is a small chance. talk about the nyse handle it. chairman jeff sprecher we haven't heard from him. the ceo came out after couple hours. did they respond too slowly. >> where is dick grasso when you need him? they complete list mishandled, at least be up front and say we don't the answers at least here we are, we'll answer any questions you have that we can. instead they sent out little notes. liz: john, it is liz i'm on the floor of new york stock exchange. i think your pr comment is taken

to heart by at leave some of the traders here who felt they were in the dark. more importantly this is one in many we've seen. nyse, the "flash freeze." august of 2013. knight trading had a situation in 2012. batts had to completely put off the ipo when they couldn't get up and running. this is not specific to the new york stock exchange but it is historic. we were arguing earlier about the perception of new york stock exchange being core of the heart of capitalism. has that lost a lot of shine or the public looks at this place as holding it all up? >> i think public still thinks the new york stock exchange as the center of world capitalism. it is certainly decreasingly so. what, 10 years ago, 80% of nyse listed stocks were traded on nyse. today it is 20%. liz: right. >> a fact we learned today, you don't actually need the new york stock exchange. those stocks can still be traded and they were. >> sir, that is a great point.

we should be careful when we throw around terms like historic and huge. this is like the worst thing in the world because it's not. this did not, this did almost nothing to the global markets. the new york stock exchange right now in terms of a trading venue is one of many. it is actually very small compared to other trading venues, particularly coming to trading of equities. this happened and there was no fallout. we're telling people there is a fallout, we're giving them, you know, we're giving them bad advice. there is fault maybe if you're shareholder of new york stock exchange or if you work on the floor of the exchange, a few people that still work there, there is fallout. tough ask about management. why was jeff sprecher and kelly leffler, who runs pr from what i understand, who happens to be his wife, i still find that troubling. you know, i worry about nepotism. not saying she isn't qualified. that troubles me. why didn't they sit down with fox business, with cnbc, and with bloomberg, all three of us,

twice, here is what it is. here's what we think happened, blah, blah. david: let's ask john. go ahead, john. >> excuse me? david: just respond to what charlie was saying. the history of the nyse is continuing as you document that history. is it in need of change? is it in need of management change here? >> well something went terribly wrong today and they mishandled it completely. i would think heads would roll at some point because, this is a real black eye to the new york stock exchange. it revealed the fact that it is much less powerful and central to capitalism that it used to be. people may wake up to say hay hey, do we really need the new york stock exchange? >> wow. >> i'm in charlie's camp but this will not help trust factor of these markets. >> maybe. it is marginal. >> to the mistrust. david: we have to pay bills. commercial break coming up. john, we want that thank thank . john steele gordon, appreciate

you coming on. want to mention alcoa which was down 5% at the end of the trading day has come back a little bit after-hours. a lot of people wondering whether there would be after-hours trading. there is some after-hours trading. it is up a little less than a percent. but still is up. that is good news. wasn't just new york stock exchange that had technical problems today. don't forget united airlines had to ground thousands of flights. "wall street journal" was also down today. were these really just technical glitches or could it be something else? our cybersecurity expert is coming up next. ♪ can a business have a mind? a subconscious. a knack for predicting the future. reflexes faster than the speed of thought.

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>> fairly new nyse president. you had a lot of successful ipos here. it has been a great run. what do you consider today? black eye? embarrassing. what kind of day wasn't. >> it wasn't my, it wasn't my best day as president of new york stock exchange. i mean i take, i take our role as, kind of the center of the capitol markets very seriously. for 223 years we stood open for business and being reliable and trustworthy. this morning as i caught wind of some anomalies the way customers were receiving messages, i stepped in, suspended market at new york stock exchange because it didn't feel like we were providing the type of market we need to. >> i want to ask a question about something that has been brought up and i know you were

asked about this but a critical point there was software up grade or system upgrade overnight and traders have told me that in the hour before the market even opened there was some issues. we saw it, some of the traders said at 8:15. we saw it clearly at 9:15. those stocks were opened manually at that time. could you think that should have been a point to you to notice that something was wrong or not really? >> the open happened fine. the open -- >> stocks were opened manually i believe. which is fine i agree. >> we opened at, maybe some of your audience doesn't know. those are two biggest trade as new york stock exchange. they represent 20% of our volume. the open happened fine. the, there was really an 11:00 or so where the concerns escalated. i was getting a number of them as opposed to preopen, it was minor and in our business there are from time to time --

>> talked about communications. weren't necessarily getting everything, you wanted to be fluid and fair and transparent, right? that was part of issue. if you had to say what happened, what happened? >> there was configuration air or in our system that caused problems. we could have continued trade and our customers would continue to have problems. i felt better way to sus spend it. figure out the configuration error and put the market back up and do it before the close because that is biggest day and 100% happens here at new york stock exchange. >> i know we had an s&p rebalance. you actually had a pretty nice close at that -- >> yeah, we did. >> other thing is people are wondering can this happen tomorrow? >> we -- >> i hope it doesn't >> i know you worked really hard with the team to get it right. >> i'm smiling not because, taking any pleasure this. i've been on the phone all day withers customers. we have three industry customer calls that i held and speaking to regulators and this same question has come up many times

and i think it's a critically important issue. today was focused finding issue and fixing it. tonight we'll focus on evaluating all our procedures and making improvement so we're not ever in this position again. but long term, continuing to get better every single day. these systems are very complex. these markets are very complex. we need to continually be evolving to be the standard-bearer. if we don't do that, we won't be largest exchange in the world. we won't be center of capital markets. >> cybersecurity comes up and we heard about united airlines, "wall street journal," apparently got flooded after nyse suspended and that may be why they had an issue but it all happened sort of at the same time. how worried were you at that point about cybersecurity or hacks? >> we spend every day, not just today, working internally on cybersecurity but also with the agencies and we did the same today. so we asked the question, we have no reason to believe this was external. in fact it was internal. and even through our

conversations with the agencies we have no reason to believe this was external. >> so what do you think is the biggest issue now going forward in this week ahead? what happens now? >> look, there is a lot of interesting things going on in the world. >> you could have gone to the disaster relief, right? could have been alternative. you didn't do that. you felt like that could have been actually even more detrimental? >> so, when we reopened today at the close you pointed out happened very, very smoothly. i have confidence in our systems and our markets. with respect to the, in fact it was an above average close as you point out. >> right. >> that's a sign of our customers kind of coming back to us having faith in us. with respect to disaster recovery there was no reason to go to disaster recovery. we communicating with customers very efficiently. i hope customers appreciate that. when we find the issue we'll reopen the market. they didn't have to do any work. if we go to disaster recovery they have to do a lot of work. >> this is my last question. you've been talking to

regulators. you were obviously talking to mr. jeff sprecher throughout the day, were you? >> absolutely. >> who was biggest, i heard about department of homeland security. president obama was briefed. john kerry was briefed. who was probably the biggest person you spoke with today? >> i don't want to comment on any of those lest offend any of those, any of those folks. such nice it to say this was a very big deal. i think it underscores our central role in the world and the capital markets and i take great pride while i'm disappointed about today's events i take great pride we opened. we found the problem. got it back up. we had a smooth close and all nyse listed stocks were able to trade all day whether here or on other venues. i understand people really care about the new york stock exchange. and, to some extent they want it to succeed. only makes me more hungry and our team more hungry to do a great job. >> tom farley, thank you for coming on. >> thank you. we're here every day and glad you were able to come on.

>> i appreciate it. david: nicole, thank you very much. you heard the stock exchange president saying it wasn't a cyberattack. anonymous appearing to take some credit. you might have seen anonymous before. this is a cyber-terrorist, if you will. taking some credit for the issue. calling for a rally on the nyse starting at 5:00 p.m. eastern. joining me morgan wright, cybersecurity analyst and senior fellow at center for digital government. morgan, how do you balance what you heard the nyse president say according to the best information they have this is not an attack with that anonymous note from last night? >> look on september 10th of 2001, if a plane went down we would have thought it was tragedy. we would have sent out the ntsb to investigate. on september 12th, everybody wants to know is this terrorism, who is behind this? with all the megabreaches and data breaches i was sitting over in the congressional hearing on opm data breach the house is holding. people don't believe it anymore. they don't believe the answer.

in fact i don't want to parse words but listening to his answer we have no evidence to indicate it was external. if it is completely internal you make the statement. it is internal. has nothing to do with external. i don't know if he is hedging his bets or regulatory language. i don't want to rule anything out or in, but i don't think we should be ruling anything out quite this fast until we get to the bottom of it. because i think perceptions what people expect in terms of americans and markets they want to know this is declarative statement that you truly know what happened, not just you're hedging your bets. david: our brethren at "wall street journal," i say brethren we used to be under same tent, we're kind of under the same tent, they also had some technical difficulties. may have nothing to do with cybersecurity issues. may be totally internal, some people put that together, look, if you want a financial attack this would be perfect. >> right. david: get a stock exchange and get one of the financial newspapers. any connection do you see there or just coincidence? >> well look, you had china.

you had "wall street journal." you had united. you had the new york stock exchange. i go back to use my airplane analogy. when one airplane goes down it is tragedy. what two go down it is disaster. when they go down it is conspiracy. i'm not suggesting conspiracy. senator feinstein saying this happens way too often, every couple weeks. not that i i don't believe in conspiracy, not an oliver stone story. but i, we're at this point now, look we crossed that rubicon. we've crossed thresh hold. people want to know now. >> wait a second. david: let me let our panel in. if you could stay with us, morgan. go ahead. >> you bet. >> this story is exciting to talk about but as portfolio manager, if i needed to get done on buying or selling 100 shares, 100,000 shares, or a million share block today, i could have gotten it executed. it does not matter. >> if terrorists were going after the part of our financial system, why go after the least important part of it, the

specialists or whatever they are on the floor of the stock exchange? you're disrupting almost no traffic. one other point i think guy, farley for one thing -- david: president of new york stock exchange. >> was pretty certain, actually they knew what the glitch was. they fixed glitch. why they got it back. so they know it was not some sort of virus that spread or some sort of worm. i should point out one other thing of the think mr. farley and rest of new york stock exchange is running around saying quote-unquote big deal because they want to be relevant. david: this is important point, charlie. you're suggesting that the nyse itself is playing up the story? >> i think. david: wouldn't they want to play it down? >> i think they like the fact that they said all trading has stopped here. media line, huge blow to the markets but gives them some more relevance which they have which is almost nothing. liz: you know, charlie. i actually had a trader. can't name the trader. a teeny part of my cynical mind is wondering on the heels of the

cme finishing and ending open outcry, meaning real traders standing on a floor and screaming just this week or couple days ago, did they almost want to prove that this place and other trades can indeed continue to go through? i think that is ridiculous because they don't they're not enjoying this. i can't imagine -- >> why would you go out and admit something is a big deal? i mean there is only one rationale to say that. you don't want people to think that you know, you screwed up in a major way. you say that because you think there is some positive impact you're getting from corporate standpoint. that positive impact in my view is the new york stock exchange remaining relevant. you heard it from the john steele gordon. he said it point-blank. this whole thing underscores the fact that you do not probably need the new york stock exchange. david: gary, what do you think about that bank shot charlie is suggesting? >> look, we're trying to read into what somebody said and how they said it. for me though today, it was a tiptoe through the tulips. did not resemble anything like we saw at the "flash crash" when the s&p went down 8% and apple

dropped 60. for me much ado about nothing. i can trade anything i want. for the nyse they better listen to the interview that rudy giuliani had with neil today explaining how to handle a crisis. they did not handle it well. they need to get better at that or else. i can tell you there will be others taking away their market share. david: james in. >> again i would like to separate the points. as chad pointed out you could still trade and it was done orderly, that is true. but we're discussing confidence in the nyse. we're discussing mistrust of these markets, from a lot of folks. again i don't think those things have to be, i think they're allowed to be mutually exclusive. david: chad? >> look, look towards global growth. this story will come and go, okay? we'll see deceleration of global growth. you want to move up the quality spectrum right now and be a little more pragmatic. david: charlie gasparino, james frischling, chad morganlander, gary kaltbaum, morgue again wright and john steele gordon,

and last by not least, my colleague liz claman from the floor. liz, great to deal with you. liz: this story is far from over. we'll send it over to deirdre bolton. she is picking up the baton and running with it. i'm right here for you, deirdre. >> liz, counting on that indeed. this hour as you were saying new york stock exchange halts, blacks out. stocks get slammed. sec, treasury department, white house all looking into what went wrong. we have what you need to know, special edition of "risk & reward" starts now. >> this is a fox business special report. ♪ >> more than three-hour halt on the new york stock exchange occurred because of a technical glitch. liz claman there on location has been covering it all. liz, of all the traders you have spoken with today. what stands ou