Web brokers break down
Ameritrade, Waterhouse suffer brief technical difficulties on sell-off day
NEW YORK (CNNfn) - Some investors hurrying to trade stocks amid Thursday's market retreat got a blood-pressure jolt from temporary service outages at two of the Internet's leading brokerages, Waterhouse webBroker and Ameritrade.
As Wall Street woke up to a stark 200-point fall in the Dow industrials, Ameritrade customers trying to log into their user accounts found themselves greeted by the ominous words "System Temporarily Down."
Meanwhile, those who tried to make trades over the brokerage's telephone lines reported long waits.
Ameritrade attributed the service problems to "a middleware problem that has been failing due to the increased volume" of site traffic over the past months, but said that Thursday's traffic surge was not to blame - the traffic had only aggravated an upgrade that didn't work well with the systems already in place.
The site had experienced smaller outages Tuesday and Wednesday.
Spokeswoman Chris Lutz said the company expected to have the technical problems cleared up by the end of September.
She also noted that additional staff had been placed on the telephone lines to deal with the additional volume while the site was down.
Waterhouse Securities' webBroker site also went down due to a "telecommunications device failure," Waterhouse spokeswoman Melissa Gidder said.
A "Service Temporarily Unavailable" page was put up on the site to alert customers to call the trading numbers instead.
The problem was not volume-related and "simply happened to occur on a busy day," Gidder said.
She also confirmed that webBroker suffered a 45-minute outage last week. It has not yet been determined whether that outage was volume related.
All online customers who called during the time the site was down paid only the flat $12 Internet trading fee rather than higher phone fees.
Online brokerage giants E*Trade and Charles Schwab reported no problems.
"It's been a busy day, but there haven't been any problems," said Elizabeth Winer, E*Trade spokeswoman. "It's not as busy as it was. Certainly not as busy as last Tuesday. In fact, we launched our new site today and so we're quite happy there haven't been any problems."
Although traffic at Charles Schwab has been higher than average in the last ten days - the Web site hit record volume of 20 million hits on Sept. 1 - the company said it had not experienced any problems.
"The site is performing very, very nicely," said spokesman Dan Hubbard. "We're constantly trying to put ourselves in a position where we can handle expanded volume."
Shares in the brokerages reflected their technical travails Thursday, with Schwab stock (SCH) falling 2 to 32-1/8 while Ameritrade (AMTD) shed 1-3/8 to 16-1/4 and E*Trade (EGRP) gained 1/4 to 19-7/16.
Toronto-Dominion Bank (TD), parent company of Waterhouse fell 1/8 to 27-3/16.
-- by staff writer Robert Scott Martin