Panic on Wall Street as NASDAQ stocks go on tailspin due to system glitch

How would you feel if a stock in your portfolio that had been trading for around $950 suddenly crashed to $123.47? Anyone would be in shock, and that is exactly what happened yesterday on Wall Street when stock prices of companies like Microsoft, Amazon, and Apple were shown as being priced at $123.47. Thankfully, it later emerged that the stock marked hadn't crashed, but that a technical glitch had caused the problem.

An unfortunate 'crash'

An error in the computation of market-related data led to a crash of Nasdaq-listed stocks on Tuesday morning -- including some of the priciest stocks like Microsoft, Amazon, and Alphabet as $123.47. According to a report on CNBC, the prices showed up in Bloomberg terminals as well, leading to widespread panic among traders, analysts, and stock market investors

Considering the speed at which the world of finance works, it did not take long for market watchers to realize that something was amiss. However, the problem in the data was picked up by Yahoo Finance and Google Finance, which ensured that there was no panic in the markets.

Needless to say, most seasoned traders must have realized that it was a glitch since it is highly unlikely that several stocks would dip to the identical price of $123.47.

Data glitch

In order to run a vast operation like Nasdaq, an enormous amount of data needs to be ironed out on a daily basis and that work is often outsourced to specialist third party financial sites. The test results ensure that the stock prices are displayed accurately at all times. However, on this particular occasion, the test results were erroneously distributed by those vendors and that eventually led to the error. A Nasdaq spokesperson who spoke to CNBC said, "As part of its normal process, the UTP distributed test data and certain third parties improperly propagated the data.

Nasdaq is working with third party vendors to resolve the matter."

CNBC tried to get reactions from both Yahoo Finance and Bloomberg but neither of them responded. However, they were able to get a hold of a spokesperson from Google Finance who confirmed that a third party was responsible for the error that could have brought Nasdaq to a standstill. However, there is no information on how Nasdaq is going to deal with the third party vendors who caused all this trouble. The spokesperson went on to add that the data was being revised and that the stock prices would be corrected.