Stocks slide as global tech outage rattles investors
NEW YORK—Stock markets slid on Friday after computer systems crashed worldwide, with sentiment also hit by US election uncertainty and Chinese economic worries.The London Stock Exchange (LSE) saw a delayed start to trading due to the glitch—the result of a faulty update to an antivirus program— which also affected airports, airlines, trains, banks, shops and even doctors’ appointments.
Later, the calculation of London’s blue-chip FTSE 100 index was frozen during part of the afternoon, as was the main index for the LSE-owned Milan stock exchange. Trading in stocks was unaffected.
“A global IT outage led to risk off sentiment,” said Axel Rudolph, senior market analyst at online trading platform IG.
The crash was caused by an update of CrowdStrike antivirus software on Microsoft’s cloud computing service.
Quick tumble
Shares in CrowdStrike, which has already issued a software fix, tumbled 11.1 percent, while Microsoft lost 0.7 percent.
Wall Street’s main stock indices tried to push higher in morning trading but quickly tumbled into the red where they lingered for the rest of the day. The S&P 500 finished down 0.7 percent.
“The market was extremely overbought so it was just a matter of time before we had a pullback,” said Tom Cahill of Ventura Wealth Management.
European shares closed lower across the board, as did most Asian markets.
Oil prices were also decisively lower, with analysts citing unease about China’s economic outlook.Aviation officials in the United States briefly grounded all planes, and airlines elsewhere canceled or delayed flights as systems running Microsoft Windows crashed.
Tech pullback
“The world grinding to a halt because of a global IT meltdown shows the dark side to technology and that relying on computers does not always make life easier,” noted Dan Coatsworth, investment analyst at stockbroker AJ Bell.
Markets had been enjoying a healthy run-up as Federal Reserve officials have lined up in recent days to suggest they are ready to begin reducing rates.
Analysts had seen a pullback in tech shares earlier this week as evidence of a rotation to other undervalued areas of the market. But losses on Thursday and Friday were fairly broad-based.
“It appeared that investors were happier taking some profits following the weeklong rotation out of tech and into value, than adding to their exposure,” said David Morrison, senior market analyst at Trade Nation.
There is also increasing uncertainty over who will run against Donald Trump in November’s US election, as calls for President Joe Biden to step aside continue to grow owing to questions about his health. —AFP
