The heads of leading U.S. stock market operators have been called to Washington for an emergency meeting on Monday, days after a spine-chilling plunge in stock prices continued to perplex U.S. regulators.The meeting, called by Securities and Exchange Commission (SEC) Chairman Mary Schapiro, is to address whether levers need to be added in trading systems to halt sudden plunges in individual stocks, a source familiar with an investigation into the events said.Exchange chiefs are also set to face Congressional hearings on Tuesday, the source said.The heat is on the SEC to employ emergency measures to prevent a repeat of Thursday's scary market plunges, when stocks usually regarded as safe inexplicably dropped precipitously for several minutes.Regulators have still given no indication that they have any idea what triggered the dive, adding to concerns among investors over what kind of market they are trading in.Tempers were short in Washington. Lawmakers wanted to know why regulators had no answers while the SEC and Commodity Futures Trading Commission said not to look for quick explanations."Clearly the Securities and Exchange Commission needs to act," an exasperated Sen. Chris Dodd, chairman of the Senate Banking Committee, said on CBS's "Face the Nation" program."They need to step up very quickly and let us know what happened here and what steps need to be taken," he said. "I don't think you need legislation in this area. You need the regulators to step up."Speculation initially centred on the possibility that there was a massive "fat finger" accidental trade by an individual but that has now been discounted.Another theory is that a huge computerised trading program was triggered by a big currency-related play amid the deepening Greece-related crisis.MEETING CALLEDThe SEC's meeting, set for Monday morning at 1000 EDT/1400 GMT, will include NYSE Euronext's Duncan Niederauer and Nasdaq OMX Group Inc's Robert Greifeld, a source said.It will discuss whether a market-wide stock-specific circuit breaker needs to be implemented, ways to possibly rein in market orders and how to address stop-loss selling, the source said.Market orders refer to immediate 'buy or sell' orders which are to be carried out no matter what the stock's current price is. Stop-loss selling, put in place to cap investor losses, refers to stocks being sold at a pre-determined level.Any new rule would need approval from a majority of the five SEC commissioners.The NYSE cut automated trading on its hybrid exchange during the market's plunge on Thursday, in an attempt to force all orders to its human specialist traders on the floor.However, it had the effect of routing all U.S. order flows to other electronic venues including its own Arca venue and rival Nasdaq. The NYSE is a two-tiered exchange with both electronic and manual trading.Investors could face queasy trading this week with markets still jittery after Thursday's nearly 1,000-point drop in the Dow Jones Industrial Average, followed by a rebound that still left prices down for the day. After another decline on Friday, stocks are now negative for the year to date."Like most people I'm just surprised an investigation of the last few days didn't provide more information," said Rick Meckler, president of investment firm Libertyview Capital Management. Meckler said that if the cause remains a mystery it will undermine confidence over the course of the year.Still, S&P 500 stock index futures pointed to a higher open, up more than 20 points on Sunday evening in New York, as European Union finance ministers agreed on emergency measures to prevent Greece's debt crisis causing turmoil in other euro zone countries.CASINO ENVIRONMENTDodd, who appeared on CBS with Republican Sen. Richard Shelby of Tennessee whose assistance he needs to steer a massive financial regulatory bill through the Senate, deplored the fact that sophisticated markets were so out of touch with the real economy that ordinary Americans live in."We need some answers pretty soon," he said, because unruly markets are a threat."You are getting some of this casino environment that is appearing in our markets," Dodd said, fostering economic risk that will force the government's hand on regulation."We need to get in place a bill, have the president sign it so that we have tools to protect our economy from these kinds of events," he said.Sources said on Saturday that the SEC was considering whether trading restrictions could be imposed across markets for companies that have fallen a certain percentage within a specific time-frame. One source said more circuit breakers at a stock level was another possibility.(additional reporting by Phil Wahba and Chris Sanders; additional reporting and writing by Glenn Somerville in Washington and Megan Davies in New York; Editing by Diane Craft and Raju Gopalakrishnan)(For more business news on Reuters Money visit http://www.reutersmoney.in)News posted by www.newsinfoline.com
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