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Stock Market Flaws Not So Rare, Data Shows
29 Mar 2012 EDT - The New York Times
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Stock market disruptions like the ones last week that temporarily shut down part of the nation’s third-largest exchange and briefly halted the trading of Appleshares are more common than investors may think.

Although traders and the public were stunned by the problems on the BATS Global Markets stock exchange on Friday, a review of industry data shows that market disruptions large and small are a daily occurrence. The frequency of the problems has rattled the confidence of some investors and companies raising money through supercharged electronic markets.

The communication breakdown that blocked trading on parts of the BATS exchange for more than an hour has been seen in at least 110 instances across the nation’s 13 stock exchanges over the last year, a review of data from Nasdaq shows. That number has gone up every year since 2007.

In one instance in January, BATS said it was unable to trade with the New York Stock Exchange for nearly 30 minutes.

Meanwhile, exchanges have halted trading in company shares after sudden spikes or falls, as happened Friday with Apple , at least 265 times over the last year — more than one for every day of trading, according to data analyzed by the Tabb Group, a market research firm. These circuit breakers kick in after stocks experience 10 percent swings in a short period of time and can be caused by a technical error or waves of electronic trading on news developments.

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