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Battered trading firm Knight Capital soars on reports that it got a financial lifeline

Published on August 3, 2012; Published on August 3, 2012

Topics :: Knight Capital , Wall Street Journal , NEW YORK, N.Y.

NEW YORK, N.Y. - Knight Capital's stock is soaring following a report that the battered trading firm got a financial lifeline that will allow it to operate for the day.

The Wall Street Journal reported that Knight received a credit line from an unnamed party and was encouraging traders to route orders through its systems again.

Knight's stock fell 75 per cent over the previous two days after the securities company said that a software problem in its systems had caused sudden, sharp swings in dozens of stocks early Wednesday.

Knight said the error will cost the company $440 million, or four times what it earned last year. Knight said it was exploring ways to raise money.

In morning trading Friday Knight's shares shot up 64 cents to $3.22, a gain of 24 per cent.

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