'Scared the Hell Out of Me': NYSE's Wild Start Rattles Wall Street

Frustrated stock investor

What You Need to Know

Wells Fargo appeared to have crashed 15% when the market opened; Walmart looked like it wiped out $46 billion.
The NYSE is investigating the opening auction and why it did not occur for some stocks, the exchange said in a statement.
Computer glitches that lead to erratic pricing and impact trading for a few minutes aren’t unheard of on American exchanges.

A chaotic open for some stocks listed on the New York Stock Exchange sent chills across Wall Street as dozens of the largest companies in the US seemed to erase billions of dollars in market value for no apparent reason, leaving some investors frustrated and others clamoring for an explanation.

Trading was halted for dozens of big-cap stocks within the first 30 seconds of Tuesday’s session after they appeared to post wild swings that puzzled investors. The NYSE’s operations were back to normal less than 20 minutes later.

Still, traders and portfolio managers were shocked by the magnitude of the apparent moves. Wells Fargo & Co. appeared to have crashed 15%, Walmart Inc. looked like it wiped out $46 billion, and AT&T Inc. seemingly swung between a 20% gain and a 21% tumble in a matter of seconds.

“It scared the hell out of me when I first saw it, one of my biggest holdings was down 12.5%,” said Matt Tuttle, CEO of Tuttle Capital Management. “I would be surprised if some people didn’t end up getting hurt in this. Yes they halted the stocks, but there were trades before the halt and I don’t know what you end up doing about that.”

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Ken Mahoney, CEO of Mahoney Asset Management, said he was trying to sell stocks like AT&T Inc. and Exxon Mobil Corp. on the initial pops. “We also thought maybe there were some arbitrage opportunities within the ETFs that hold the affected stocks,” he said in a message to Bloomberg News.

Meanwhile, Jonathan Corpina, senior managing partner at Meridian Equity Partners who is usually on the exchange trading floor but was working remotely on Tuesday morning, frantically relayed information to customers and traders.

“My traders on the floor are getting pummeled,” he said. “All of our phones are lighting up. All of our customers are calling asking what happened.”

The NYSE is investigating the opening auction and why it did not occur for some stocks, the exchange said in a statement. Investment and trading firms can consider filing claims on trades that were affected by the glitch, according to the statement. The US Securities and Exchange Commission said it also is reviewing the trading activity.

Scarce Details

“It was a bit of a scramble,” said Justin Wiggs, managing director in equity trading at Stifel Nicolaus. “We had quite a few names affected. But once it got to critical mass where more tickers were impacted, investors got less frantic since they realized it was a bigger problem than just the one ticket they had an issue with.”