With the Dow climbing past the 10,000 mark, periodic outages have blemished the promise of instant access to the stock market via online brokerages. In some cases, customers have been blocked from trading for hours at a time drawing closer scrutiny of the industry by federal and state regulators.
E*Trade's problems this morning started about 15 minutes after the market opened when some account holders were unable to trade or view their portfolios, spokeswoman Lisa Nash said. "We're attributing it to the Dow 10,000."
The higher volume was also driven by the expiration of futures and options contracts today, known as "triple-witching."
One E*Trade account holder told CNET News.com that one of his trades went through but he lost money on others that didn't. "This is the worst I've ever seen it," said the trader, an E*Trade customer for a year and a half.
E*Trade competitor Charles Schwab has also encountered periodic technical difficulties with its service. On Wednesday, Schwab's trading function was down for 15 minutes, and on one day in late February its customers were blocked from trading for an hour and a half.
Both sites have seen huge gains in traffic in recent months, which could be contributing to the problems. According to NetRatings, daily page views on E*Trade's site grew from 7.5 million on September 1 of last year to 124.7 million on January 1. At Schwab, daily page views rose from 12.4 million to 36.6 million.
Last month, E*Trade's trading function was inaccessible to some of its customers intermittently over a period of three days, sparking a class-action lawsuit. The company attributed those glitches to a software upgrade, not volume constraints, however. Some customers who called the company's service lines were kept on hold for more than 30 minutes, and a special service email address received more than 2,500 complaints.
At the time, E*Trade said it was growing its customer service staff quickly, but today, many customers encountered busy signals when calling the company's toll-free numbers. "Our hold times are way, way down since January," Nash said.