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