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Wednesday, Aug 1, 2012 10:27 PM UTC

Biggest story you missed

The trading system went haywire on Wall Street

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Topics: Wall Street, Finance, Stock Market, U.S. Economy, technology,

Biggest story you missedFILE - In this July 3, 2012 file photo, a trader studies his screen as he works on the floor of the New York Stock Exchange. U.S. stock futures fluctuated in volatile trading Thursday, July 5, 2012, as banks in China and Europe took action to bolster flagging economies and poor retail sales for June offset some promising job numbers from the Labor Department. (AP Photo/Richard Drew, File) (Credit: AP)

Amid the Olympic bedlam, with London businesses gone quiet, the New York Stock Exchange went nutty this morning with 30 minutes of unusual trading activity. As the New York Times reported, the NYSE is investigating the so-called “irregular trading” that resulted in severe price fluctuations for numerous popular stocks, among them Citigroup and Bank of America. Many traders suspected Knight Capital Group, a high-powered brokerage firm, of mucking things up.

A statement from Jersey City-based Knight claimed that “a technology issue occurred,” which could have resulted from the Retail Liquidity Program implemented by the NYSE today. The new program, which mimics quick trading firms, will compete with Knight for retail investment business. Regardless, the hectic scene reminded some of the “flash crash” of May 2010, when the American market saw a 10 percent decline in about 15 minutes.

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