Computer glitch halts trading of some stocks

Ahead of an eagerly anticipated Federal Reserve policy announcement, trouble arises from a malfunctioning algorithm.

Anthony Mirhaydari for MSN writes: "It was going to be a busy trading session Wednesday, with a heavy economic calendar and a Federal Reserve policy announcement all coming ahead of a European Central Bank announcement Thursday.

But that doesn't explain the wild swings in both directions seen in many stocks early Wednesday morning.

Stocks like Dole Food (DOLE -0.43%) and China Cord Blood (CO +11.74%) surged on no news, while gold, silver and related mining stocks were getting hammered. Kinross Gold (KGC -3.37%) was down more than 10% at one point. The problem, it seems, is related a malfunctioning computer trading algorithm.

The story is still developing, but the problem seems to be at market maker Knight Capital (KCG -18.01%), which has told clients to reroute trades to other brokerages because of a delay in order processing. Order handling and execution of nonlisted securities, smaller over-the-counter issues, seem unaffected.

Rumors are floating that Knight has a problem with one of its algorithmic computer trading systems.

Full story developing, see the link below.
http://money.msn.com/top-stocks/post.aspx?post=84cf7386-3e10-4053-8dc3-0046efc47acc

Comment:  Traders are punishing shares of Knight Capital as we write.