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NYSE Busts Trades as Anadarko's Stock Falls to a Penny

A sharp drop that drove Anadarko Petroleum Corp.'s (APC) to a penny in the last second of trading Friday exposes a vulnerability in trading rules adopted last month to curb sharp stock swings.Andarko's stock fell from over $90 a share to as low as one penny in fraction of a second and then recovered, closing up $2.22, or 2.5%, to $90.03, according to FactSet. NYSE Euronext (NYX) canceled all trades executed below $87.56 that took place between 3:59 p.m. EDT and 4:00 p.m., according to an alert sent to traders at 4:42 p.m.Last month, exchanges launched a framework to curb sharp stock swings. The so-called limit-up/limit-down system does away with single-stock circuit breakers set up by the Securities and Exchange Commission in the wake of the "flash crash" on May 6, 2010, when the Dow Jones Industrial Average fell nearly 1,000 points in a few minutes.Limit-up/limit-down is designed to prohibit wild price swings by allowing defining valid trades only in within certain price bands. For An...

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