NYSE proposes end of day news embargo to combat algos

Investing.com - The NYSE has announced plans to embargo news for listed companies for five minutes after the 4pm close.According to a notice posted on the SEC website this week,the proposed move is a bid to protect NYSE’s closing auctions from trading algorithms. Companies sometimes release important news just after 4pm, but before the NYSE has published closing prices.Algos scan news releases in search of signals to buy or sell stocks.They execute trades if they find phrases such as 'record' 'revenues' or 'merger'.This can lead to spurts of volatility and confusion among investors.The NYSE closing auctions determine the closing prices for stocks,which in turn determine the value of ETFs and other index funds.The NYSE is the last US exchange yet to fully automate closing auctions.