Computer meltdown on Wall Street still baffles officials

Traders applauding Duncan L. Niederauer, chief of NYSE Euronext, on Friday. He had defended his exchange in an interview.

 The New York Times - A day after a harrowing plunge in the stock market, federal regulators were still unable on Friday to answer the one question on every investor’s mind: What caused that near panic on Wall Street?

Through the day and into the evening, officials from the Securities and Exchange Commission and other federal agencies hunted for clues amid a tangle of electronic trading records from the nation’s increasingly high-tech exchanges.

But, maddeningly, the cause or causes of the market’s wild swing remained elusive, leaving what amounts to a $1 trillion question mark hanging over the world’s largest, and most celebrated, stock market.

The initial focus of the investigations appeared to center on the way a growing number of high-speed trading networks interact with one another and with venerable exchanges like the New York Stock Exchange. Most investors are unaware that these competing systems have fractured the traditional marketplace and have displaced exchanges like the Big Board as the dominant force in stock trading.

The silence from Washington cast a pall over Wall Street, where shaken traders returned to their desks Friday morning hoping for quick answers. The markets remained on edge, as the uncertainty over what caused Thursday’s wild swings added to the worries over the running debt crisis in Greece.


In a joint statement issued after the close of trading, the S.E.C. and the Commodity Futures Trading Commission said they were continuing their review. And the two agencies indicated they were looking particularly closely at how different trading rules on different exchanges, which temporarily halted trading on some markets while activity in the same stocks continued on other markets, might have contributed to the problem.

Drug Makers, Hospitals Raise Prices

The Wall Street Journal - Hospitals and pharmaceutical companies have been pushing through hefty price increases aimed at bolstering earnings, even as government and private insurers are struggling to rein in healthcare costs.

Drug makers increased prices on drugs like Viagra and the leukemia pill Sprycel by more than 20% in the first quarter from a year earlier, according to data from Credit Suisse. Meanwhile, one of the largest hospital owners in the country, HCA Inc., said Tuesday it expects to report higher revenue for the first quarter even though it had fewer hospitals and its admissions declined. It also said its income before taxes had nearly doubled.http://online.wsj.com/article/SB123975436561018959.html

ATT Wants Lock On IPhone

The Wall Street Journal - When Randall Stephenson became AT&T Inc.'s chief executive, the company had just started offering the iPhone. The blockbuster device has since reeled in millions of new customers and helped revitalize the telecom giant's brand.

But AT&T's exclusive deal to carry the iPhone in the U.S. expires next year, according to people familiar with the matter, and Mr. Stephenson is now in discussions with Apple Inc. to get an extension until 2011.

An Apple spokeswoman declined to comment, saying only, "We have a great relationship with AT&T."

Keeping the iPhone away from rivals and finding the next hit devices, such as smart phones and multimedia handheld tablets, are among the challenges the 48-year-old CEO faces as he shifts AT&T's energy away from the crumbling U.S. landline phone business and into the wireless market, where technologies evolve quickly and hit products don't last long.

Mr. Stephenson also is seeking to overhaul AT&T's marketing to make wireless the priority. The next step, he said, is to do away with a requirement that customers have AT&T's home-phone service to qualify for discounts on TV or broadband Internet services. Being a wireless customer should be enough, he said.http://online.wsj.com/article/SB123973238611017715.html#mod=testMod

Stocks Slide in Asia, Europe on concerns about U.S.

The New York Times - PARIS — Shares in in Europe followed Asian indexes lower Tuesday on continued concern about the health of the corporate sector and the widening effects of the financial crisis.

In Europe, attention turned to the plight of lenders t active in Eastern Europe after Moody’s Investors Service said it might downgrade banks with units in the region. Investors are worried about the debts owed by banks in Eastern Europe to financial institutions in western European countries, especially Austria, Belgium, Germany, Greece and Italy.

“The effects of the slowdown are continuing to widen geographically, especially to countries that have been reliant on demand in the West,” said Henk Potts, equity strategist at Barclays Wealth in London.

Amid fears about exposure to Eastern Europe, Erste, a bank based in Vienna, lost 7.7 percent. Swedbank, based in Stockholm, fell 3.6 percent, while UniCredit, the Italian bank, lost 5 percent. http://www.nytimes.com/2009/02/18/business/18markets.html

Amid Turmoil, U.S. Turns Away From Decades of Deregulation

WASHINGTON -- The housing and financial crisis convulsing the U.S. is powering a new wave of government regulation of business and the economy. Federal and state governments alike are increasingly hands-on in their effort to deal with failing businesses, plunging house prices, worthless mortgages and soaring energy prices. The steps add up to a major challenge to the movement toward deregulation that has defined American governance for much of the past quarter-century since the "Reagan Revolution" of the early 1980s. In fact, some proponents today of a bigger oversight role for government are Republican heirs to the legacy of President Reagan.http://online.wsj.com/article_print/SB121694460456283007.html