New York - SEC Halts Short-Selling in 799 Financial Stocks

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New York - The Securities and Exchange Commission temporarily banned short-selling on 799 financial stocks to boost investor confidence on Friday, one day after the UK Financial Services Authority took a similar step.

"The Commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets," SEC Chairman Christopher Cox said in a statement.

"This action, which would not be necessary in a well-functioning market, is temporary in nature and part of the comprehensive set of steps being taken by the Federal Reserve, the Treasury, and the Congress," Cox said.

The SEC’s emergency order will be effective immediately and will terminate at 11:59 p.m. New York time on October 2, 2008, the Commission said in a statement.

The order may be extended beyond 10 days if the SEC deems an extension necessary in the public interest and for the protection of investors, but the order will not be extended for more than 30 calendar days in total duration, it said.

"Today’s decisive SEC action calls a time-out to aggressive short selling in financial institution stocks, because of the essential link between their stock price and confidence in the institution," the statement said.

"The Commission will continue to consider measures to address short selling concerns in other publicly traded companies," it added.

The decision is positive for stocks, analysts said.