Aiming to avoid another "flash crash," federal regulators on Thursday approved new "circuit breaker" rules that would briefly halt trading of some stocks that make big rapid swings in value. Last month, the Dow Jones Industrial Average plunged nearly 1,000 points in less than a half an hour, and about 30 stocks listed in the Standard & Poor 500 index fell more than 10% within five minutes.
According to the new rules approved by the Securities and Exchange Commission, trading will be halted for five minutes on any S&P 500 stock that rises or falls by 10% or more in a five-minute period between 9:45 a.m. and 3:35 p.m. Eastern time.
The major exchanges will begin a six-month trial with the circuit breakers as early as Friday. The program may later be expanded to cover the stocks of thousands of public companies not included in the S&P 500.
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