US SEC cancels the ban of short selling!

US SEC cancels the ban of short selling!
Oct 10, 2008 03:28
ZOEY Points: Join Date: Nov 29, 2004 Status: offline	On Wednesday night, US SEC (Securities and Exchange Commission) annouced that the ban on short selling was lifted. This has made stocks plunge seriously. Yesterday, the S&P 500 index fell about 7.6 percent and the Dow Jones Industrial Average slumped 7.3 percent. It is the first time that Dow Jones Industrial Average has closed below 9000 points since 2003 and it has fallen by 42 per cent from its all-time high a year ago. Many investors believe that it was all because of canceling the ban of short selling. General Motors and Morgan Stanley led the market lower yesterday. MS plunged 16 percent at midday and GM, 15 percent lower. Although MS has suffered heavey losses, the insiders said that they ahd expected this and their plan to sell 21 percent stake to Japan's Mitsubishi UFJ Financial Group for $9bn won't be affected. Why did US suddenly stop the ban of short selling? Did they expect the market's reaction?

Oct 10, 2008 03:28

ZOEY
Points:
Join Date: Nov 29, 2004
Status: offline

On Wednesday night, US SEC (Securities and Exchange Commission) annouced that the ban on short selling was lifted. This has made stocks plunge seriously. Yesterday, the S&P 500 index fell about 7.6 percent and the Dow Jones Industrial Average slumped 7.3 percent. It is the first time that Dow Jones Industrial Average has closed below 9000 points since 2003 and it has fallen by 42 per cent from its all-time high a year ago.

Many investors believe that it was all because of canceling the ban of short selling. General Motors and Morgan Stanley led the market lower yesterday. MS plunged 16 percent at midday and GM, 15 percent lower. Although MS has suffered heavey losses, the insiders said that they ahd expected this and their plan to sell 21 percent stake to Japan's Mitsubishi UFJ Financial Group for $9bn won't be affected.

Why did US suddenly stop the ban of short selling? Did they expect the market's reaction?

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