NYSE invokes special rule to calm markets

City A.M. Reporter
The New York Stock Exchange and NYSE Amex Cash Markets have invoked a rule to smooth trading at the market open, as futures pointed to a sharp drop in the major indexes.

Rule 48 allows the exchange to suspend price indications that help determine the floor price at the open during regular sessions. Bypassing the requirement helps speed the beginning of trading.

Among the triggers for invoking the rule are "substantial activity in the futures market before the open," according to the exchange's website.

S&P 500 futures lost 27.7 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures fell 250 points, and Nasdaq 100 futures dropped 47.5 points.