Ah, yes, the joys of computerized stock trading strike again, sending the S&P index all a-twitter and forcing a momentary shutdown of the Big Green Money Machine.
As if it wasn’t bad enough when mere soulless sociopaths were running the fine details of the financial world.
From the BBC:
The New York Stock Exchange (NYSE) has launched an investigation into “irregular trading” after a series of unusual swings in some stocks.
The NYSE identified 140 stocks with higher-than-normal trading volumes, including popular stocks like Citigroup and American Airlines.
The unusual trading occurred at the start of the trading day.
The moves brought back memories of the “flash crash” of 2010, when the Dow Jones index fell 10% in just minutes.
“The NYSE and NYSE MKT are currently reviewing irregular trading identified by our people and systems” in 140 stocks between 9:30 am EST and 10:15 EST on Wednesday, the exchange said.
Read the rest.
More from Nathaniel Popper of the New York Times:
Traders immediately pointed fingers at one of Wall Street’s most powerful brokerage firms, Knight Capital Group, speculating that a “rogue algorithm” kept buying or selling millions of shares of companies for 30 minutes, sending their shares soaring or plunging. The Jersey City-based company said in a statement that “a technology issue occurred” in the division of the company that uses computer algorithms to buy and sell stocks from other market participants.
As Knight, one of the biggest market makers in the United States financial markets, rushed to contain the problem, it asked customers to send trades to other brokers. Knight’s stock dropped nearly 25 percent on Wednesday morning.
The event draws renewed attention to the increasing fragility of the United States stock markets as they have grown more fragmented and reliant on high-speed-trading firms like Knight. The volatility recalled the so-called flash crash of May 6, 2010, when the entire American market dropped nearly 10 percent in about a quarter of an hour.
And this, from Andrew Tangel of the Los Angeles Times:
The trading problems caused the Standard & Poor’s 500 index to lose more than four points before the index regained its ground, Bloomberg News reported.
The U.S. Securities and Exchange Commission said it is looking into the matter.
Knight’s over-the-counter securities “and trading in its other businesses are not affected,” the brokerage said. “The company continues to review internally.”
The NYSE, for its part, said its trading platform and safeguards to halt trading in stocks that make sharp swings did not experience problems.
“At this time, we believe NYSE systems and circuit breakers operated normally during this period, and we are working with all market participants on the issue,” the exchange said in a statement.
Perhaps they were using that HAL-9000 computer from Stanley Kubrick’s immortal film, 2001: A Space Odyssey?