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Hedge Funds ‘Frozen in Headlights’ Scale Back Trading

Hedge-fund managers, Wall Street’s best compensated and supposedly smartest investors, are dazed and confused.

Reeling from the worst second-quarter performance in a decade, hedge funds have scaled back trading as they struggle to figure out where markets are headed amid sometimes vicious crosscurrents in stock, commodities and other markets, according to brokers and managers.