This Day In Market History: NYSE Braces For Potential Y2K Chaos

Each day, Benzinga takes a look back at a notable market-related moment that happened on this date.

What Happened? On this day 22 years ago, traders braced for a potential disruption of the global financial system from the Y2K bug.

Where Was The Market? The S&P 500 was trading at 1,469.25 and the Dow Jones Industrial Average was trading at 11,497.12.

What Else Was Going On In The World? In 1999, the euro was established as the new common currency in Europe. Online peer-to-peer file sharing service Napster was launched. Average U.S. income per year was $40,810.

Y2K Fears: The stock market closed at 1 p.m. on the final trading day of 1999, giving traders and NYSE officials a few extra hours to prepare for what could have been one of the largest disasters in financial market history.

At the time, NYSE technicians has spent $30 million over the four years leading up to the turn of the century to rewrite and test software that otherwise might not have known how to handle the change. 

The fear was that the Y2K bug, computers’ potential inability to handle dates beginning with 2000 rather than 1900, would create chaos in the world economy. A pileup of data errors in the programs that control the NYSE’s basic operations would potentially grind the entire stock market to a halt.

Testing prior to the turn of the century revealed that SuperDot, the NYSE program that oversees communications between the stock exchange and brokerage-house members, was riddled with Y2K bugs prior to the technical fixes engineers deployed.

All’s well that ends well for the NYSE. When trading resumed on Jan. 3, 2000, the first session of the 21st century went off without any major hiccups.