WASHINGTON — Federal regulators yesterday expanded the number of stocks covered by new “circuit breakers’’ that can pause volatile trading, a program in response to the panicked May 6 market plunge.
The Securities and Exchange Commission approved expansion of the six-month pilot program of circuit breakers for stocks in the Standard & Poor’s 500 index. Now all stocks in the Russell 1000 index also will be covered.
The program, which began in mid-June, briefly halts trading of stocks that make big price swings. Trading of covered stocks that rise or fall 10 percent or more within a five-minute span is halted for five additional minutes.
The “flash crash’’ on May 6 saw the Dow Jones industrials plunge nearly 1,000 points in less than a half-hour. About 30 stocks listed in the S&P 500 index fell at least 10 percent within five minutes.
Regulators and lawmakers have acknowledged that the massive disruption undermined investors’ confidence in the financial markets.
US stock exchanges and the brokerage industry’s self-policing organization are expected to begin putting the expanded circuit breakers into effect early next week, the SEC said.
