For all that, the Dow, S&P, and NASDAQ ended unchanged! (all right, Dow was down 0.3 percent).
We saw the mother of all short coverings at the open, fueled by the government's proposed RTC-type bailout, the ban on short selling in financials, and a quadruple witching expiration.
But after the initial short covering, financials quickly came off their highs. Morgan Stanley,for example, opened near $34 but quickly moved as low as $26 in the first 40 minutes, before trading in the relatively narrow range of $26 to $30, closing at $27.21.
Most other financials also came off their highs at the open and then traded in a fairly narrow range. Result: another day of near-record volume, 9.3 billion shares traded in NYSE listed securities.
- Market Outlook: Is It Safe To Get Back Into Stocks?
- Think Banks Are Out of the Woods? Think Again
- Don't Blame Short-Sellers for Bank Crisis: Chanos
In general, traders have been in favor of some kind of "brake" on short selling (bring back the uptick rule, etc.) but they are NOT generally in favor of banning short selling.
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