GO
Loading...

UPDATE 1-Power outage hits Knight Capital, cutting off trading

(Adds comment from company spokeswoman, trader)

Oct 31 (Reuters) - Knight Capital told clients on Wednesday to route all stock orders away from the brokerage due to power issues as a result of the massive storm that slammed into the U.S. East Coast.

The Jersey City, New Jersey-based brokerage said its backup generator went down, making it unable to buy and sell stocks on behalf of clients. The company was operating on generators after the massive storm Sandy devastated the New York metro area, knocking out power for millions.

The company's institutional equities sales and trading and market-making clients have been told to send their orders elsewhere, a spokeswoman for Knight said.

``That is to protect clients while we determine what the issue is,'' she said.

The company is one of the nation's largest market makers - brokerages that buy and sell stocks for clients and ensure orderly trading. It said clients should ``seek an alternate destination'' for trading in NYSE-listed and Nasdaq stocks, along with options trades.

``All computer interfaces with Knight will be shutdown with no new orders, both by phone or electronic, being accepted at this time,'' the company said.

Three months ago, Knight Capital was forced to route orders to other brokerages due to a technology problem that sent tons of errant trades into the market, causing a loss of $440 million for the firm.

``Its not a panic though because not that many people are trading,'' said Paul Weisbruch, vice president of exchange-traded fund and options sales and trading, at Street One Financial. He said the company was getting calls from clients rerouting orders to them.

Knight's shares are down 3.8 percent at $2.52.

(Reporting by John McCrank; Editing by James Dalgleish, Bernard Orr)