"The systems were fine -- it was getting people to run the systems that was the issue, which in of itself is also an issue, as they were unwilling to run without human intervention," IDC Financial Insights analyst Marc DeCastro stated in an email response to Computerworld.
However, IDC's report criticized the NYSE's contingency plan, "or as it turns out, the lack of a continuity plan," for such a natural "black swan" event, because the plan called for the stock market to operate "as an electronic-only exchange for the first time in its history."
"Keeping the market open on a purely electronic basis, with the market having never operated this way even under perfect conditions, would only increase the chance of any minor malfunction to a high-frequency trading algorithm, causing potentially great disruption," IDC wrote.
IDC suggested that regulators and financial institutions need to discuss what can and cannot be done during widespread disasters.
In its report, titled " Sandy Surfaces the Importance of the 'Human Machine' on Wall Street," IDC stated that because of the sheer physical damage across lower Manhattan, it's expected that critical IT systems of many Wall Street institutions would not be fully functioning under full power.
Floodwaters from Hurricane Sandy shuttered two data center buildings in lower Manhattan when their backup diesel generators failed, according to a report on the news aggregation site Slashdot. A third Manhattan data center also reported it was without power.
News and media sites crashed under the weight of traffic overloads as New Yorkers and others throughout the U.S. overwhelmed the websites for weather updates and news about Sandy. The financial information site MarketWatch on Monday posted a notice on its home page saying, "We are experiencing technical difficulties. The full MarketWatch site will return shortly."
"Almost every major news outlet was negatively impacted in some way, but specifically, CNN, Weather.com, The New York Times, Bloomberg, The Wall Street Journal and The Los Angeles Times had the most severe slowdowns," reported Keynote, an Internet and mobile cloud testing and monitoring service.