- - Wednesday, May 4, 2011

SEC

Regulator: ‘Flash crash’ could happen again

There is no fool-proof way to prevent a repetition of the May 6, 2010, “flash crash,” but measures being implemented by federal regulators should help insolate the markets from volatile price swings, the chief U.S. securities regulator said Wednesday.

As the one-year anniversary of the flash crash approaches, Securities and Exchange Commission Chairman Mary Schapiro spoke to reporters about the event on the sidelines of a Senate appropriations hearing.

Last year’s unprecedented drop sent the Dow Jones industrial average down some 700 points in minutes before it sharply rebounded — a rapid breakdown that exposed deep flaws in the mostly electronic U.S. marketplace.

Miss Schapiro said the agency has moved swiftly to implement key reforms, including circuit breakers to dampen stock market volatility; new rules for breaking clearly erroneous trades; rules banning “naked access” to the market; and a prohibition on stub quotes, or offers to buy or sell stock at prices that are not in line with the prevailing market.

Now, the SEC is preparing to seek comments on its limit up, limit down proposal — a plan seen as more sophisticated than disruptive circuit breakers because it would restrict traders to price bands without halting trading outright.

CURRENCY

Dollar falls against euro before meeting

NEW YORK | The dollar fell to an 18-month low against the euro Wednesday, the day before the European Central Bank meets to set interest rates.

Analysts don’t expect the central bank to raise rates Thursday, but investors will watch European Central Bank President Jean-Claude Trichet’s news conferences for clues about the timing of the next rate hike.

Analysts expect two more rate hikes this year, but when they will occur is uncertain. Last month, the ECB raised its refinancing rate to 1.25 percent from 1 percent.

Chris Walker, a currency strategist at UBS, said in a research note that two more rate hikes are expected “to come sooner — in July and October,” instead of later in the year, as previously thought.

Central banks raise interest rates to curb inflation. Higher rates also tend to increase demand for the currency linked to that country or region.

The euro rose to $1.4849 late Wednesday, up from $1.4821 Tuesday. Earlier, the euro was worth $1.4942 — its highest point since December 2009.

TECHNOLOGY

Chips redesigned to boost computers

SAN FRANCISCO | You’ll need more than 3-D glasses to see what Intel has planned for its next batch of computer chips.

Intel announced Wednesday that the electronic switches on those chips are getting a third dimension — “fins” that jut up from the base to help regulate power consumption. The development means consumers can expect computers to keep getting cheaper and more powerful. It will help Intel compete with low-power chips used in mobile devices.

Chips with the 3-D transistors will be in full production this year and appear in computers in 2012.

Intel has been talking about 3-D or “tri-gate” transistors for nearly a decade, and other companies are experimenting with similar technology. The announcement is noteworthy because Intel has figured out how to manufacture the transistors in mass quantity cost effectively.

WEST VIRGINIA

Massey: Miners’ families each offered $3 million

CHARLESTON | Massey Energy Co. says it has offered families of the 29 miners killed in last year’s West Virginia coal mine explosion $3 million each to settle their claims.

The detail is contained in a regulatory filing ahead of a proposed buyout by rival Alpha Natural Resources. It’s the first confirmation from the company on the size of its settlement offer.

The document also details how Massey held out for months before accepting a $7.1 billion buyout from Alpha. Massey ultimately secured a sweetened offer of 1.025 shares of Alpha stock plus $10 in cash for each of its shares.

GAMING

Nintendo cuts Wii price, offers cheaper game set

NEW YORK | Nintendo is dropping the price of its Wii game system by $50 to $150 and cutting the price of several popular games ahead of next year’s launch of the successor to the console.

Starting May 15, the newly priced Wii system will come in either black or white with a “Mario Kart Wii” game and a Wii Wheel accessory, replacing the previously included “Wii Sports” and “Wii Sports Resort” games.

The price cut — the second one since the Wii launched for $250 in 2006 — comes less than a month after the Japanese company announced the console will have a successor next year. Nintendo Co. said in late April it will show off a playable model of the new system at the Electronic Entertainment Expo, which runs June 7-9 in Los Angeles.

The company said Wednesday that the “Nintendo Selects” collection of games will come with a suggested retail price of $20.

From wire dispatches and staff reports