Glitches send Dow on wild ride http://money.cnn.com/2010/05/06/markets/markets_newyork/index.htm?hpt=T1 NEW YORK (CNNMoney.com) -- In one of the most gut-wrenching hours in Wall Street history, the Dow plunged almost 1,000 points Thursday before recovering to close down 348, as erroneous trading in Procter & Gamble and several other stocks sparked a massive selloff.
Fears about the spread of the European debt crisis dragged on stocks through the early afternoon. But the selling picked up in intensity and the Dow reached its nadir at around 2:40 p.m. ET.
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Hot Stocks What's moving the markets Dow 30 Widely held stocks The selling was a result of technical glitches that caused some stocks, including Dow component Procter & Gamble (PG, Fortune 500), to plunge 37% to $39.37 per share from the close of $62.12 Wednesday. The consumer products maker recovered most of that loss by the close, ending just 2% lower.
But the faulty P&G trading was responsible for 172 of the 998.50 points that the Dow Jones industrial average (INDU) lost at its worst, the biggest one-day point decline on an intraday basis in Dow Jones history.
Accenture, 3M, Sotheby's and other stocks may have been impacted by similar problems. (For details,click here)
At the closing bell, the Dow was down 348 points, or 3.2%, to end at 10,520.32. The Dow's biggest one-day point decline on a closing basis was Sept. 29, 2008, when it fell 777.68, which had also been the previous intraday mark.
The S&P 500 index (SPX) slipped 38 points, or 3.2%. The Nasdaq composite (COMP) dropped 83 points, or 3.4%.
"On the Dow, we were down 400 to 800 points in five minutes, it was horrifying," said Art Hogan, chief market strategist at Jefferies & Co.
Beyond the erroneous trades, the selling pressure of the last few days has been more technical than fundamental, said Hogan. He said the market collapsed some major technical support levels, and could be in for more selling Friday.
P&G stock drops 37% -- not really However, there are a few factors that could help stabilize the market Friday, said Peter Cardillo, chief market economist at Avalon Partners, including news on Greece.
"The key is to get Germany's vote tomorrow in favor of the Greek aid package from the European Union," he said. "If that happens, that could help calm fears and stabilize the market."
Friday's big April jobs report could end up being a non-event, said Donald Selkin, chief market strategist at National Securities. "We've had good economic reports all week and it hasn't happened."
The CBOE Volatility (VIX) index, Wall Street's so-called fear gauge, closed at 34.16, its highest finish since May 4, 2009. Earlier, it had spiked as high as 40.71, a 62% jump and its biggest one-day surge since February 2007.
Selkin said that often when the VIX gets over 40 that can be a sign that the selling has been overdone, which could be good. But with the fear gauge closing below that level, it may not provide a boost Friday.
"International markets are obviously going to get hit over night and futures are pointing to a weak open in the U.S.," Selkin said.
0:00 /6:02NYSE CEO explains selloff Gold spiked above $1,200, the euro plunged to a more than 1-year low against the dollar and oil prices fell. Treasury prices rallied, sending the corresponding yields lower as investors sought safety in government debt prices.
The run from the euro and into the dollar and U.S. government debt was a classic flight to quality, said Ted Weisberg, NYSE floor trader, Seaport Securities. He said that the continued weakness of the euro was going to be a big drag on the markets as it pummels dollar-traded commodities and also hurts companies that do a lot of business overseas.
After the close, both the Securities and Exhange Commission and the Commodity Futures Trading Commission said that they would be looking into the unusual trading that took place Thursday.
Movers: All 30 Dow components slid, with oil components Chevron and Exxon Mobil, financial leader JPMorgan Chase, and tech names Hewlett-Packard and IBM among the big losers. 3M, Boeing and United Technologies added to the weakness.
Market breadth was positive. On the New York Stock Exchange, winners beat losers 17 to 1 on volume of 2.58 billion shares. On the Nasdaq, advancers topped decliners seven to one on volume of 4.48 billion shares.
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