STOCK MARKET WATCH -- Thursday, 2 August 2012

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12. Knight Bruised As Analyst Estimates $170 Million Loss

http://www.bloomberg.com/news/2012-08-02/knight-bruised-as-analyst-estimates-170-million-loss.html

The latest black eye for U.S. equity markets is proving a body blow for Knight Capital Group Inc. (KCG)
Shares of the Jersey City, New Jersey-based firm plunged 33 percent, the most ever, in record volume yesterday as investors speculated on how much a breakdown that whipsawed owners of 140 stocks will cost the company. Its loss may be as much as $170 million, according to analysts at JPMorgan Chase & Co.

Knight, led by 57-year-old Chairman and Chief Executive Officer Thomas Joyce, has been at the center of U.S. equities for a decade as one of the biggest market makers, executing almost $20 billion of trades a day in June. Its importance was never so visible as yesterday when its computers helped spur sudden price swings of 10 percent or more in dozens of companies.
“This isn’t good for the market overall and it’s not good for Knight,” Sang Lee, managing partner at Boston-based research firm Aite Group LLC, said in a phone interview. “They took a beating in their share price. It’s not going to devastate the business of Knight since they’re a major market maker in equities. But when you’re a major player like Knight, mistakes will have a more expanded impact.”