Single employee causes Wall Street crash

If you thought you were having a bad day in the office, spare a thought for this Wall Street worker who may have single-handedly brought down the US stock market.

On Thursday, (Wednesday local time), a simple human error reportedly triggered wild swings and volatility on the New York Stock Exchange (NYSE) when trading opened in the morning.

More than 250 companies suffered from wild swings in just a couple of minutes, with stocks changing by 25 per cent of their normal market value.

Big brand names were caught up in the catastrophe including McDonald’s, Walmart, Exxon Mobil, Wells Fargo and Morgan Stanley.

Tens of billions of dollars were wiped off in market value.

As confusion set in, the NYSE came clean, admitting that the “root cause” of the screw-up was a “manual error”.

According to Bloomberg, a staff member at the NYSE backup data centre reportedly failed to properly shut down Cermak’s disaster-recovery system, prompting the crisis.

The crux of the issue lies in the fact that by leaving the backup system running, the exchange’s computers thought that trading had not ceased from the day before.

As a result, some stocks behaved as if trading had already started, with no opening prices being set, sending the market into a meltdown.

The regulator, US Securities and Exchange Commission, indicated they were investigating the matter.

The NYSE said it will declare the trades carried out with incorrect prices null and void.

Overall, about 4,341 trades went through that “should be busted,” or cancelled.

Around 84 stocks were affected and marked as “aberrant”, the NYSE said in a market update.

And it wasn’t just the NYSE that was impacted.

The chaos had flow-on effects which spread to Nasdaq, CBOE Global Markets and private venues.

The total cost of the disaster is as yet unclear.