[ by Howard Haykin ] Knight Capital Group (KCG) Shares Fall 20%. The NYSE and Knight are investigating unusual swings (up and down) of 10% or more in dozens of U.S. stocks - all without explanation or accompanying news.  The activity took place in the first minutes of trading, whipsawing investors and spurring speculation that computers distorted prices for the second time in 2 weeks.  For example:

Goodyear Tire & Rubber Co. (GT) rose >10% in the opening minutes. Manitowoc Co. (MTW) jumped 14%. Pandora Media Inc. climbed 11% percent. Level 3 Communications Inc. plunged 15% before the swings narrowed minutes later.

Trading was halted on at least 5 stocks after they tripped so-called "circuit breakers"designed to prevent surges and plunges linked to unusual trading.  China Cord Blood Corp. soared more than 150%, CoreLogic fell more than 11%, Trinity Industries rose 17%, Kronos Worldwide climbed 19%, and Molycorp fell almost 18%. Knight, the Jersey City, New Jersey-based brokerage ... and one of the largest market makers for U.S. equities, is "looking into" the trades, according to an emailed statement from a spokesperson.  The NYSE said it was reviewing trades in 148 securities executed between 9:30 a.m. and 10:15 a.m. ET, according to a statement on its website. Will 8/1/12 Become the Next 5/6/10 (Flash Crash)? It’s "yet another example of how the market structure plumbing is responsible for massive price distortions," Joseph Saluzzi, co-head of equity trading at Themis Trading LLC in Chatham, NJ said.  "August 1st will be another day that will destroy investor confidence just like the May 6th flash crash." Impact on Knight. Meanwhile it's uncertain why Knight continues to be down over 20% as of 1 p.m. ET.  Knight’s market-making business traded a daily average of $19.5 billion worth of equities in June with volume of 3.1 billion shares, according to the company’s website. Repeating Patterns. This unusual trading comes 2 weeks after investors in 3 of the biggest DJIA (INDU) stocks witnessed repeating fluctuations, fueling speculation the moves were a consequence of computerized trading.  At that time, on 7/19/12, it affected shares of IBM, McDonald’s, and Coca-Cola.  Share prices swung between successive lows and highs in intervals that began near the top and bottom of each hour. Regulators have increased scrutiny of computerized strategies that rose to prominence in the U.S. after more than a decade of market structure reform. The SEC and CFTC blamed a broker’s algorithm for setting into motion the events that caused the 5/6/10 Flash Crash that  briefly erased $862 billion from U.S. equities in less than 20 minutes.   [Bloomberg, 8/1/12]