Stock shock roils US Congress amid Wall St debate

* U.S. House markets panel sets hearing for Tuesday

* Technology errors must not spook markets – Rep Kanjorski

* Sen Corker takes wait-and-see approach

* SEC launches investigation into sell-off -source

By Kevin Drawbaugh and Thomas Ferraro

WASHINGTON, May 7 (BestGrowthStock) – Shock waves from the U.S.
stock market plunge rolled through Washington on Friday and
underscored that Wall Street reforms under debate in the Senate
do little to address complex technology blamed for the fall.

A glitch in market mechanics — tagged by some as the
possible source of the breath-taking 9 percent drop on Thursday
— could be the source of financial upheavals to come.

Congress has not visited the market technology issue in
detail in some time, let alone considered legislation.

The sell-off — marking the largest intraday decline in the
history of the Dow Jones industrial average — will be examined
by a congressional subcommittee at a hearing on Tuesday, said
U.S. Representative Paul Kanjorski, chairman of the panel.

“The financial market’s dramatic swing was incredibly
startling,” Kanjorski, head of the capital markets subcommittee
of the House of Representatives, said in a statement.

“Reports have surfaced that much of this movement was
potentially as a result of a computer glitch. We cannot allow a
technological error to spook the markets and cause panic. This
is unacceptable.”

Thursday’s market plunge coincided with Senate debate on
the most sweeping overhaul of Wall Street regulation since the
Great Depression. It would establish a new government protocol
for dismantling large financial firms in distress, set up a
financial consumer watchdog and regulate over-the-counter
derivatives.

Stock market technology is not a major focus of the bill.

Republican Senator Bob Corker told reporters on Friday the
sell-off should not impact the regulatory reform legislation
before the Senate.

“Hopefully, hopefully, hopefully, nobody will try to offer
an amendment to try to correct what happened yesterday when we
don’t know what created it yet,” Corker said on Capitol Hill,
calling for time to let regulators investigate the matter.

“At some point down the road, there may be something that
needs to be addressed. But today, I don’t think any of us
really know what happened,” he said.

The benchmark average closed down 347 points on Thursday
following a far steeper plunge in afternoon trading that market
sources have said may be attributable to an erroneous trade.

President Barack Obama on Friday said, “The regulatory
authorities are evaluating this closely, with a concern for
protecting investors and preventing this from happening
again.”

The SEC has launched an investigation, a source familiar
with the matter said on Friday.

On Thursday, the SEC and fellow market watchdog the
Commodity Futures Trading commission said they were working
closely with other regulators and exchanges to review the
unusual trading activity.

In an investigation, the SEC would look for any wrongdoing
that may have been related to the stock market drop.

Treasury Secretary Timothy Geithner spoke for the second
day in a row with the heads of the SEC and CFTC about the
sell-off, a Treasury official said on Friday.

Geithner spoke by phone with SEC Chairman Mary Schapiro and
CFTC Chairman Gary Gensler, but the Treasury official did not
offer details on the content of their discussions.

The Dow Jones industrial average (.DJI: ) was down 77 points,
or less than one percent, at late morning on Friday.

Investing Basics

(Additional reporting by Donna Smith, Rachelle Younglai,
David Lawder; Editing by Andrew Hay)

Stock shock roils US Congress amid Wall St debate