For the second time in a two-week span the Dow Jones Industrial Average rallied more than 450 point over a two-period. On both occasions the rally occurred after the Securities and Exchange Commission (SEC) issued an emergency order. On July 15 the SEC issued an emergency order restricting naked short selling of Freddie Mac, Fannie Mae and a group of 17 investment banks. On July 29 they extended that order through August 12.
The SEC stated in the order, “The Commission has concluded that there now exists a substantial threat of sudden and excessive fluctuations of securities prices generally and disruption in the functioning of the securities markets that could threaten fair and orderly markets.”
The SEC determined that those conditions still existed in extending the order.
