Sonic Automotive covered under SEC short-sale ban

WASHINGTON, Oct 02, 2008 (Reuters via COMTEX) -- SAH | Quote | Chart | News | PowerRating -- Auto dealership chain Sonic Automotive Inc was added on Thursday to the New York Stock Exchange's list of company stocks that are not permitted to be shorted.

Under a temporary U.S. Securities and Exchange Commission order, more than 950 companies involved in financial services are not allowed to be shorted until Congress passes a $700 billion bill to rescue the financial system.

The short-sale ban is to expire three business days after the legislation is passed and will not last beyond Oct. 17.

About two weeks ago, the SEC named 799 financial companies subject to the temporary ban in an attempt to restore equilibrium to markets spooked by bank failures and a breakdown in the financial system.

But companies, some with major financial operations, complained and the SEC allowed the exchanges to add to the list.

No companies were removed from the NYSE list and Nasdaq made no changes to its list on Thursday.

Short-sellers borrow shares they consider overvalued and sell them. If the price drops, they repurchase the shares, return them and pocket the difference.

(Reporting by Rachelle Younglai, editing by Gerald E. McCormick) Keywords: SHORTSELLING/LISTS

Rachelle Younglai vj

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