Contagion from Bear Stearns and MF Global spread to other publicly held brokers on March 17, but the day that followed calmed fears and actually rallied the sector.
A sharp drop in the markets sent MF Global down 65% while FC Stone dropped 40%, Penson 22%, GFI Group 21% and Interactive Brokers (IB) 14%. Shares in all of those companies advanced on March 18 after Federal Reserve Bank dropped the federal funds rate to 2.25% from 3% and the market digested false rumours.
After its dramatic drop at the start of the week, MF Global shares rose 34% to $8.15 on March 18, while FC Stone recovered virtually...