The stock market took the biggest drop ever on Thursday, most likely caused by an error in a computerized selling program. Add in Greece and a weak economy, most stocks took a beating today. Below is an excerpt of the article from the Yahoo Finance page.
Wall St. rollercoaster: Stocks fall nearly 10 pct
Stocks take record tumble, nearly 10 pct, before regaining some; typo may have caused selloff
NEW YORK (AP) — A computerized selloff possibly caused by a simple typographical error triggered one of the most turbulent days in Wall Street history Thursday and sent the Dow Jones industrials to a loss of almost 1,000 points, nearly a tenth of their value, in less than half an hour. It was the biggest drop ever during a trading day.
The Dow recovered two-thirds of the loss before the closing bell, but that was still the biggest point loss since February of last year. The lightning-fast plummet temporarily knocked normally stable stocks such as Procter & Gamble to a tiny fraction of their former value and sent chills down investors’ spines.
“Today … caused me to fall out of my chair at one point. It felt like we lost control,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.
No one was sure what happened, other than automated orders were activated by erroneous trades. One possibilility being investigated was that a trader accidentally placed an order to sell $16 billion, instead of $16 million, worth of futures, and that was enough to trigger sell orders across the market.
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