Two incidents show vulnerabilities of American trade markets

By Marc Castro

Aug 23, 2013 02:06 PM EDT

The recent technological breakdowns have exhibited the vulnerability of the US stock market to these kinds of issues and glitches. This issue is further exacerbated by the fact that regulators and market operators are increasing their reliance on electronic devices to do trades for increased speed and efficiency.

The latest technical issue resulted in a shut down of the NASDAQ marketplace thus making the 3,000 listed stocks, including the most valuable ones such as Apple and Google, frozen and unable to trade for over three hours. This shutdown caused ripples throughout Wall Street, resulting in investor reticience as well as the decline in other markets such as S&P500. Many brokers were unable to do trades because of the lack of information previously accessible from the NASDAQ.

This comes after Goldman Sachs had released erroneous trades that caused disruption on option trading. These two incidents have placed into the limelight the reliability and integrity of financial markets as well as the companies that are entrusted by Americans to generate funds for the investments provided. 

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