A glitch yesterday at NYSE Euronext's Arca stock market that caused State Street Global Advisors Inc.'s SPDR S&P 500 ETF (SPY) to drop 9.6% has some advisers spooked.
“It does create concern to see these kinds of glitches, especially for advisers like myself who are relying a fair amount on ETFs,” said Charles E. Fitzgerald, a principal with Moisand Fitzgerald Tamayo LLC. His firm has a little under $1 million invested in the SPDR S&P 500 ETF.
“And it’s not like we are using exotic ETFs, we tend to use ones that are based on broad indexes,” added Mr. Fitzgerald, whose practice advises on a total of $180 million in client assets.
A new software release at Arca caused the hiccup by initiating a closing auction in the ETF at 4 p.m. Eastern time instead of 4:15 p.m. Eastern, said Raymond Pellecchia, a NYSE spokesman.
As a result, the closing price of the ETF was shown as $106.46, down from the opening level of $117.74. That would have meant a $7.9 billion loss for the ETF. All trades at the $106.46 price were later voided, and the closing price was updated to $118.54, Mr. Pellecchia added.Read Full Story