Exchanges slide as investors worry about volumes

Exchange operator CME Group Inc., which reported last week that its October trading volume rose 13 percent, fell $26.12, or 9.7 percent, to $242.93. The company is the parent of the Chicago Mercantile Exchange and the Chicago Board of Trade as well as the New York Mercantile Exchange, which it acquired in August.

Meanwhile, InterContinental Exchange Inc. fell $7.19, or 9 percent, to $73.02.

Some exchanges showed more modest declines amid a broader market pullback. Nasdaq OMX Group Inc. fell $1.18, or 4.3 percent, to $26.16, while NYSE Euronext declined 79 cents, or 2.9 percent, to $26.09.

Investors have worried in the year since the stock market's slide began that trading volumes for everything from stocks and bonds to commodities will decline as nervous investors retreat to the sidelines and some financial firms falter under heavy losses.

Deutsche Bank Securities analyst Rob Rutschow said investors are nervous about weak trading activity hurting profits.

Specifically, he said, they are worried that difficulties among hedge funds will curtail their activity.

Hedge funds have been credited with exacerbating the volatility seen in many markets in the past year and their retreat from the market appears to be weighing on exchanges. Some hedge fund managers try to profit by making complex bets in the market--these moves, in turn, add to the business that exchanges see.

"You continue to hear bad news about hedge funds every day. The impact on volume has to be negative," Rutschow said.

Hedge fund investors are facing a Saturday deadline to turn in any year-end "sell" orders. The Nov. 15 redemption barrier has caused speculation that some investors will withdraw their money from the market and park it in cash or bonds, thus requiring fewer trades.