Nasdaq resumes trading after 3-hour shutdown

CNBC

Trading resumed on the Nasdaq exchange after a three-hour shutdown that halted trading in such high-profile companies such as Apple (AAPL), Microsoft (MSFT) and Facebook (FB). A problem affecting quote dissemination starting at 12:14:03 ET froze trading in all securities in the longest shutdown at the exchange in recent memory.

Despite the freeze, Nasdaq that it would not cancel orders. "Nasdaq will not be canceling open orders on the book. Customers who wish to cancel their orders may do so and any customer who wishes to not participate in the re-opening should cancel their orders prior to the resumption of trading," a spokesman said during the shutdown.

(Read more: Recent market delays due to technical glitches )

"When everyone comes back online at the same time that's when even more dangerous things can happen in the marketplace," said Sal Arnuk, the co-founder of Themis Trading.

A spokesman for the SEC said, "We are monitoring the situation and are in close contact with the exchanges."

(Read more: Stocks hold gains after Nasdaq trading reopens; Apple is weak)

The Nasdaq (NDAQ) options markets also issued a "system update" saying they were recommending firms route all open orders elsewhere. An average of 1.6 billion shares have been traded on the Nasdaq every day this August, according to statistics from Sandler O'Neill.

The New York Stock Exchange halted trading in all Nasdaq securities at its request and canceled orders. The NYSE otherwise declined comment. The CME said it saw 'no impact' from Nasdaq's trading halt.

(Read more: 'Knight-mare': Trading Glitches May Just Get Worse )

"You can't trade if you can't get the quotes out," said Rich Repetto of Sandler O'Neill Partners.

"They want everybody else to shut down Tape C trading so they can restart over at the Nasdaq and until they do they can't restart", said CNBC contributor Pete Najarian. Tape C refers to any securities traded over the Nasdaq.

"If I was back in the days of 10 years ago managing 300 traders I'd put the directive out to every one of them 'we don't put any orders in at the open' ... no one trades for 60 minutes," said Joe Terranova, chief market strategist for Virtus Investment Partners and a CNBC contributor.

The shutdown of exchanges without an external crisis is rare, but a stray squirrel shut down the Nasdaq in 1987, according to the New York Times.

- Written by CNBC's Matt Hunter. Reuters contributed to this report


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