Dow At 10,000 May Be Threat To Computers
By Neil Winton, Science and Technology Correspondent
LONDON (Reuters) - Investors will be cracking open the champagne later Friday if the Dow Jones Industrial Average bursts through 10,000, but their glee will be
shortlived if this historic moment causes computers to crash or triggers rogue buy or sell programs.
The New York Stock Exchange closed yesterday at a record high, as excitement over the robust U.S. economy hurled the Dow Jones index within striking distance
of 10,000.
The Dow ended more than 120 points higher at 9,897.44.
But experts point out that some computer programs might literally be unable to handle the euphoria of 10,000 on the Dow.
Systems designed to handle only the four digits up to 9,999 may read the fifth digit in 10,000 incorrectly. If the Dow Jones closes at 10,102, some computers could
read this as 102 or 1,010. This has the potential to either freeze systems or trigger automatic sell programs.
Many brokerage systems have pre-set percentage movement triggers which suspend trading when limits are breached.
In May 1998, when the Dow Jones Index moved into the 9,000s, U.S. technology research firm Gartner Group warned its clients that this was a potential problem.
Andy Kyte, Gartner Year 2000 analyst, said because of the wide publicity when this advice was given, many financial trading organizations took action to avoid
damage. ''If no one had said anything then and the Dow had hit 10,000 several large organizations would have had a brief period of significant loss of IT (information
technology) systems which they need for trading,'' Kyte told Reuters Friday.
''The question is, is it possible that there are some residual problems. Whether they took the warning and didn't do a sufficiently exhaustive job; or they ignored the
warnings. On balance there will be small number of residual problems,'' Kyte said.
''If the Dow hits 10,000 champagne corks will be popping but IT managers in large trading organizations will be keeping their champagne on ice for an hour or so
while they check their automated trading systems,'' Kyte said.
The London Stock Exchange declined to comment on the possibility of any distortions to trading.
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