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. 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. 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.
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When Tiger's speech causes a more dramatic volume impact than the FOMC you know this market is all sorts of perfectly efficient. Bloomberg's chart of the day below shows the total NYSE volume change in-between when Tiger started his convoluted and meandering mea culpa, and when he ended.FOMC stands for Federal Open Market Committee, a.k.a. "The Fed" that many disinfo.com visitors have plenty to say about. So Tiger had more impact than a Fed Discount Rate hike announcement that day, good to know for the next time I talk to some finance guy who cold calls me about getting into the market... Seems like just more proof that, as the Onion recently put it (brilliantly), money is a "symbolic, mutually shared illusion."