A rush of unusually high volume ripped through a handful of stocks in early trading on Wednesday, disrupting normal activity and causing a halt in trading in a handful of New York Stock Exchange-listed stocks.
Heavy computer-based trading caused several different unrelated shares to be halted, diverting trader attention from the day's economic releases. The broader market was nonetheless little changed as this quickly became the day's focus.
"I think that has disrupted all the normal activities - stocks are moving all over the place, they are weird, they are trading like millions of shares, 100 shares at a time, so something went haywire somewhere," said Stephen Massocca, managing director, Wedbush Morgan in San Francisco.
Several traders attributed the problem to computer-generated trades through market maker Knight Capital , but Knight was unavailable for comment. CNBC reported a spokesperson for the firm was looking into the trading activity. Shares of Knight were down 6.3 percent in active trading.
The volatility caused pauses in trading for five stocks, which appear to be unrelated: Corelogic Inc , China Cord Blood Corp , Kronos Worldwide , Trinity Industries
and Molycorp .
A spokesperson for NYSE Euronext had no immediate comment.
Trading in those names was much heavier than normal: Molycorp traded more than 5.7 million shares in the first 45 minutes of trading. The stock usually averages about 2.65 million shares daily, and it was one of the stocks halted due to excessive volatility.
The activity sparked concern amongst traders, who said the problem was much wider than the five halted stocks.
"It appears to be dozens if not hundreds of stocks that have gone extremely high volume and extremely rapid movement," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.