In the search for the problem at the root of the apparent breakdown of trading on May 6, launched with such fanfare and urgency but so far showing scant results, investigators may have to confront an awkward question: What if there wasn’t any problem?
Everyone in a position of authority seems to have jumped to the conclusion that something went seriously wrong when the Dow Jones Industrial Average suddenly lost nearly 1,000 points and that it was only a matter of identifying the culprit(s). Securities and Exchange Commission Chairman Mary L. Schapiro called the plunge “unacceptable.”
Even before knowing the cause, stock exchanges canceled trades that occurred between 2:40 p.m. and 3 p.m. at prices 60% above or below the price at 2:40 p.m. Nasdaq alone canceled more than 10,000 trades involving at least 1.4 million shares.
Full story: Was There Really a Trading Glitch? – Investing – Stocks – SmartMoney.com