Updated from 6:49 a.m.

Shares of Knight Capital ( NITE) plunged after Wall Street saw some weakness in the big Nasdaq trade execution firm's fourth-quarter profit report.

An analyst says Knight's "core'' trade execution business showed signs of stalling in the quarter despite a reported 12% gain in fourth-quarter profit.

In early trading, shares were down $2.13, or nearly 10%, to $19.34.

In the quarter, Knight earned $47.4 million, or 45 cents a share, up from $42 million, or 41 cents, a year ago. Revenue rose 29% to $260 million.

The company says on an operating basis, which excludes certain one-time items, it earned 33 cents a share. On that basis, Knight, which is based in New Jersey, beat the Thomson Financial consensus forecast of 32 cents a share by a penny.

But Sandler O'Neill analyst Rich Repetto says 21 cents of the operating earnings came from Knight's Deephaven hedge fund business. Its core market making division generated just 12 cents a share in earnings.

Repetto had been looking for earnings of 38 cents a share, well above the consensus estimate.

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