Another week: another bizarre trading glitch. This time around, Kraft's stock whipsawed in the first 60 seconds of the trading day.
After closing at $45.48 Tuesday, shares of Kraft (KRFT) spiked nearly 29% in the first minute of trading Wednesday, to $58.54. By 10:32 a.m. ET, Nasdaq, NYSE Arca and BATS cancelled all trades in Kraft that came in at or above $47.82, according to spokespersons at both exchanges.
Under Securities and Exchange Commission rules, exchanges can quickly cancel trades that are "clearly erroneous."
The bizarre trades came one day after Kraft officially started trading separately from Mondelez (MDLZ), Kraft's former snack business that includes Oreos, Cadbury chocolates and Nabisco. Kraft Foods now runs the grocery business, which includes Kraft cheese and salad dressing brands, as well Maxwell House Coffee, Philadelphia Cream Cheese and Miracle Whip.
A source close to the situation said that the erroneous order was placed by a single trading firm. Several market watchers said a trader or computer program may have simply placed an incorrect order price by mistake since Kraft and Mondelez only started trading separately yesterday.
While the problems from this glitch appear to have been fixed quickly, Nasdaq is once again playing a lead role in a trading issue. Kraft switched its listing from the New York Stock Exchange to the Nasdaq (NDAQ) in June. At the time, it appeared to be a big win for Nasdaq to gain what was then a Dow component in the wake of the Facebook IPO debacle. (UnitedHealth (UHC) bumped the new, smaller Kraft from the Dow in September).
Kraft's stock traded up roughly 2.51% by mid-afternoon Wednesday. Mondelez's shares dipped slightly.
Knight Capital Group (KCG) said Thursday that it will face a $440 million loss for causing a glitch that affected trading activity in nearly 150 NYSE-listed stocks.
Knight said in a statement that it has closed out of all its positions related to the erroneous orders and removed the software that caused the problems from it systems.
Shares of Knight, which fell 33% Wednesday, plunged as much as 54% in early trading MOREMaureen Farrell - Aug 2, 2012 10:13 AM ET
Knight Capital Group (KCG) was behind a series of bizarre moves in otherwise thinly traded stocks early Wednesday.
Knight spokesperson Kara Fitzimmons acknowledged that "a technology issue" occurred in its market-making unit that affected how shares for some 150 NYSE-listed stocks were routed. "Knight notified its market-making clients this morning to route listed orders away," she said in a statement, adding that the company continues to investigate.
Knight's shares dropped more than MOREMaureen Farrell - Aug 1, 2012 12:28 PM ET
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