U.S.: Basic stock market "circuit breaker" rules

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Headline: How Market Circuit Breakers Work

Source: Associated Press, 17 September 2001

URL: http://www.latimes.com/business/la-000074734sep17.story?coll=la%2Dheadlines%2Dbusiness

If U.S. stock prices plummet today, they could trigger so-called circuit breakers that would temporarily halt trading. Here's a look at the circuit breakers that were initially put in place in the wake of the 1987 market crash and have been adjusted throughout the years:

-- A 1,100-point drop in the Dow Jones industrial average before 2 p.m. EDT would halt trading for one hour. Trading would be halted for 30 minutes if that decline occurred between 2 p.m. and 2:30 p.m. If the decline occurred after 2:30 p.m., trading would not be halted. The Dow closed a week ago at 9,605.51, so a 1,100-point drop would be a decline of 11.5%.

-- A 2,150-point Dow drop (about 22%) before 1 p.m. would halt trading for two hours; for one hour if between 1 p.m. and 2 p.m.; and for the rest of the day if 2 p.m. or later.

-- A 3,250-point drop (about 34%) would halt trading for the rest of the day regardless of the time.

Other curbs on certain types of institutional trading are triggered when the Dow moves 210 points (about 2.2%) or more above or below its previous close.

-- Andre Weltman (aweltman@state.pa.us), September 17, 2001


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