Morning Agenda: Nasdaq’s Latest Breakdown

PRICING PROBLEM HALTS NASDAQ FOR THREE HOURS  |  A technological problem shut down trading on the Nasdaq market and its more than 3,000 stocks for more than three hours Thursday afternoon, Nathaniel Popper reports in DealBook. The halt was prompted by a problem with the data system that disseminates prices, Nasdaq officials said, adding that the cause had been “identified and addressed.”

The latest trouble showed again how the stock market “remained vulnerable to technological breakdowns even as regulators and market operators work to keep up with trading that is increasingly electronic and driven by speed,” Mr. Popper writes. “The disruption on the nation’s second-largest stock market, after the New York Stock Exchange, reverberated up and down Wall Street, affecting other markets as investors cautiously stepped back.”

The chief executive of one Wall Street firm, who asked not to be named, said: “We didn’t lose any money on the shutdown, but we also made very little money today.”

Thursday’s episode brought back memories of past difficulties for Nasdaq, which trades shares of some of the world’s most prominent technology companies. Squirrels â€" two of them â€" have caused power failures, and computer glitches have led to market interruptions. Last year, the initial public offering of Facebook was plagued by errors at the exchange.

“While Nasdaq’s failure on Thursday appears to be one of the most significant technology problems to strike the markets, it was less important than the earlier errors in one key way,” Floyd Norris writes in DealBook. “When Nasdaq determined it was unable to distribute quotes on all stocks listed on its exchange, it asked that other markets that trade Nasdaq stocks also halt trading, and they did. As a result, no one could trade.”

BIG NAME IS LEAVING BOIES’S FIRM  |  David M. Bernick, a former general counsel at the tobacco giant Philip Morris, is leaving his current firm, Boies Schiller & Flexner, after just a year there, DealBook’s Peter Lattman reports. He is expected to announce on Friday that he is headed to the law firm Dechert, according to people briefed on the matter. It is the third time in recent months that a well-known partner has left the firm, which was started by the renowned trial lawyer David Boies.

MOODY’S THREATENS TO CUT BANK RATINGS  |  Moody’s Investors Service threatened on Thursday to downgrade the credit ratings of several big financial firms, arguing that the government was now more likely to let large banks fail in a crisis, DealBook’s Peter Eavis reports. Moody’s, if it follows through, could reduce the ratings of giants like Goldman Sachs, Morgan Stanley and JPMorgan Chase as much as two grades.

“Such a move might weigh most heavily on Morgan Stanley because a two-notch downgrade would leave the company just above a junk credit rating. But the effects on the bank may also be muted,” Mr. Eavis writes. “Confidence in large banks, judging by their stock prices and other financial indicators, appears to have risen since Moody’s cut their ratings last year.”

ON THE AGENDA  |  Robert Greifeld, the chief executive of the Nasdaq OMX Group, is scheduled to appear on CNBC at 7:30 a.m. Central bankers and economists have descended on Jackson Hole, Wyo., for the Federal Reserve Bank of Kansas City’s annual monetary policy conference. Janet Yellen, the vice chairwoman of the Fed, is expected to moderate panel discussions.

NEW CLAIMS AGAINST EX-SAC TRADER  |  Federal prosecutors filed an updated indictment in the criminal insider trading case against Mathew Martoma, a former SAC Capital Advisors portfolio manager, adding a claim that he got secret information about drug trials from a second doctor, DealBook’s Peter Lattman reports. After originally claiming that one doctor leaked Mr. Martoma the results of clinical tests â€" allowing SAC to earn profits and avoid losses totaling $276 million â€" the government now claims that Mr. Martoma corrupted two doctors to obtain confidential data about a drug being developed by Elan and Wyeth.

The second doctor has not been charged and was described only as a “co-conspirator.” The first doctor, Sidney Gilman, a neurologist at the University of Michigan, has agreed to testify against Mr. Martoma.

Mergers & Acquisitions »

How BlackBerry Handled Its Past Prosperity  |  In better times, BlackBerry handled its profits in “a way that served BlackBerry executives well and that pleased Wall Street but provided no benefits to loyal shareholders,” Floyd Norris, a columnist for The New York Times, writes.
NEW YORK TIMES

Bidders Line Up for Panasonic’s Health Care Unit  |  Toshiba, K.K.R. and a consortium that includes Bain Capital “are expected to participate in the final round of bids next week for Panasonic Corp.’s health care business, a deal that could fetch as much as $1.5 billion, sources with knowledge of the matter said on Friday,” Reuters reports.
REUTERS

Tribune Papers Are No Longer on Kochs’ Radar  |  Still, Charles and David Koch continue to be interested “in the media business” and are exploring opportunities, a spokeswoman said.
NEW YORK TIMES

J.C. Penney Adopts Takeover Defense  |  The struggling retailer adopted a “poison pill” shareholder rights plan that would be triggered if an investor acquired at least 10 percent of the company’s shares.
BLOOMBERG NEWS

A Second Act for AOL Co-Founder  |  Stephen M. Case, who engineered the disastrous merger of AOL and Time Warner, is “thriving again, in a self-made role that in some ways makes him more influential than ever,” Bloomberg Businessweek reports.
BLOOMBERG BUSINESSWEEK

Sears, Facing Weak Sales, Reports a Loss  | 
ASSOCIATED PRESS

INVESTMENT BANKING »

Goldman Banker Arrested on Rape Charges in East Hampton  |  A Goldman Sachs managing director, Jason Lee, 37, was charged with raping a young woman in an East Hampton rental home, authorities said on Thursday. A lawyer for Mr. Lee said his client “adamantly denies the allegations.”
NEW YORK TIMES

Asian Currencies Fall, But Fears of Contagion Are Muted  |  “South and Southeast Asia are being buffeted by broad shifts in international economics, but with Japan and China to the north largely unaffected, fears of a more widespread crisis are being played down,” Keith Bradsher reports in The New York Times.
NEW YORK TIMES

UBS Reorganizes Hedge Fund Business  |  UBS promoted an executive of its $5.2 billion hedge fund business as part of a larger push to increase assets under management, Bloomberg News reports.
BLOOMBERG NEWS

PRIVATE EQUITY »

Equity Firm Said to Be in Talks for Stake in Hexaware of India  |  Baring Private Equity “is in final talks” to buy 68 percent of Hexaware Technologies, an Indian software company, for about $400 million, The Wall Street Journal reports, citing an unidentified person familiar with the matter.
WALL STREET JOURNAL

A New Refinancing Offer for Billabong  | 
WALL STREET JOURNAL

HEDGE FUNDS »

Icahn Tweets Dinner Plans With Apple’s Chief, and Investors Applaud  |  Despite the hullabaloo over the Nasdaq stock market’s failure on Thursday afternoon, traders remained fixated squarely on Apple’s then-frozen stock price. Why? Because Carl C. Icahn had taken to Twitter again.
DealBook »

I.P.O./OFFERINGS »

Alibaba Said to Push to Allow Partners to Nominate Board Members  |  The Chinese e-commerce giant, which analysts expect could be valued at $100 billion or more in an initial public offering, has made a proposal to allow key executives to retain control over corporate strategy, according to a person with knowledge of the matter.
DealBook »

Nasdaq’s Halt Briefly Pauses a Good Day for a Newly Public Company  |  Shares in Regado Biopharmaceuticals, a drug maker and the only company to stage its market debut on Thursday, had risen more than 20 percent before Nasdaq halted trading in all its listed stocks.
DealBook »

VENTURE CAPITAL »

Uber Is Valued at $3.5 Billion in Financing Round  |  Uber said in a filing that it sold shares to the private equity firm TPG. AllThingsD reports that, in addition, Uber has received an investment from Google Ventures.
ALLTHINGSD

The Pentagon as Tech Incubator  |  “In the last year, former Department of Defense and intelligence agency operatives have headed to Silicon Valley to create technology start-ups specializing in tools aimed at thwarting online threats,” Somini Sengupta writes in The New York Times.
NEW YORK TIMES

A Start-Up Scene for Ad Agencies  |  Boulder, Colo., is increasingly becoming known as a home for entrepreneurs in the advertising business, Stuart Elliott writes in The New York Times.
NEW YORK TIMES

Consumer Services Company Raises $23 Million  |  Slice, which makes an app that helps people manage purchases and organize receipts, is announcing on Friday that it has raised $23 million in a financing round led by the Japanese e-commerce giant Rakuten.
SLICE

LEGAL/REGULATORY »

An Expanded ‘Cooling Off’ Period for the S.E.C.  |  The Securities and Exchange Commission “is making more of its staff who leave the agency for the private sector subject to a one-year cooling-off period,” Reuters reports.
REUTERS

Airlines Propose Trial Date to Fight U.S. Lawsuit  |  American Airlines and US Airways sought a 10-day trial that would begin Nov. 12, as they prepared to defend their planned merger, Reuters reports.
REUTERS

British Credit Card Customers to Be Reimbursed  |  Some of the largest banks and credit card companies in Britain will have to pay a total of up to $2 billion to customers who were sold inappropriate financial products, a British regulator said on Thursday.
DealBook »