Companies Economy International The Buzz Corrections Pre-market Trading After-hours Trading US Stocks Bonds and Interest Rates Currencies Commodities Mutual Funds World Markets Subscribe to Real Money Newsletter Subscribe to Money Magazine Money Magazine Real Estate Taxes Jobs Ask the Expert Money 101 Autos Mutual Funds The Help Desk Loan Center Best Places to Live Subscribe to Money Magazine Ask the Expert Ultimate Guide to Retirement Retirement Calculators Rules of Retirement Best Funds Best Places to Retire Fortune Tech Apple 2.0 Blog Big Tech Blog Tech Talk Questions & Answers Innovation Nation Small Business Video 50 Best Places to Launch Resource Guide Next Little Thing Subscribe to Fortune Magazine Fortune 500 Fortune Tech Investing Management Executive Interviews Rankings Log in Register Log Out Profile Alerts Newsletters My Watchlist
TRADING
CENTER

Glitches send Dow on wild ride

chart_dow_dip2.top.gif By Alexandra Twin, senior writer


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.

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.

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.

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.

European debt problems accelerate: Stocks have been sliding on and off for the last two weeks as investors mull the ramifications of the growing debt crisis in Europe.

While European leaders have pledged to provide Greece with $146 billion in loans over the next three years, attempts by the nation to institute certain "austerity" measures to bring down the deficit have sparked riots and other violent outbursts.

Meanwhile, investors are concerned that the size of the bailout will make Europe less able to help Spain, Portugal and other debt-plagued nations. The so-called PIIGS also include Italy and Ireland.

"There's no question that Europe and Greece, and specifically the fear of contagion, is what's driving the market lower," said Hank Smith, chief investment officer at Haverford Investments.

"Having said that, we also have to be cognizant that the market was due for a pullback at a minimum, and possibly a correction," he said.

He noted the market hasn't had a correction - technically defined as a selloff of 10% on a closing basis - for at least 14 months.

A slew of good - but not great - retail sales reports from the nation's chain stores, and a report that showed weekly jobless claims dropped were also in focus.

Economy: The number of Americans filing new claims for unemployment fell to 444,000 last week from a revised 451,000 the previous week. Economists surveyed by Briefing.com thought claims would fall to 440,000.

Continuing claims, a measure of Americans who have been receiving benefits for a week or more, dropped to 4,594,000 from a revised 4,653,000 in the previous week. Economists expected 4,600,000 continuing claims.

The report was released one day ahead of the government's closely watched April jobs report, due Friday morning. That report is expected to show employers added 187,000 jobs to their payrolls after adding 162,000 in March, according to economists surveyed by Briefing.com.

The growth is considered a step in the right direction, but the number of new jobs is not yet enough to keep up with the number of new entrants in the labor market.

The unemployment rate, generated by a separate survey, is expected to hold steady at 9.7%.

Corporate news: Troubled mortgage lender Freddie Mac (FRE, Fortune 500) reported an $8 billion quarterly loss Wednesday and also said it needs another $10.6 billion from the federal government. The company was put into conservatorship by the government during the height of the financial crisis in 2008, along with its sister company Fannie Mae (FNM, Fortune 500).

World markets: In overseas trading, European markets tumbled, with France's CAC 40 down 2.2%, Germany's DAX down 0.8% and London's FTSE down 1.5%.

Asian markets fell. Japan's benchmark Nikkei index lost 3.3% as investors reacted to the European debt crisis after a long holiday. The Hong Kong Hang Seng lost 1% and the Shanghai Composite lost 1%.

The dollar and commodities: The dollar rallied early versus the euro, with the European currency falling to its lowest level since March of 2009. But by late day, the dollar had turned lower. It also fell versus the Japanese yen.

U.S. light crude oil for June delivery dropped $2.86 to settle at $77.11 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery rose $22.30 to settle at $1,197.30 per ounce.

Bonds: Treasury prices rallied, lowering the yield on the 10-year note to 3.40% from 3.55% Wednesday. Treasury prices and yields move in opposite directions.

-- Staff reporters Hibah Yousuf and Julianne Pepitone contributed to this report. To top of page

As the oil creeps closer ...
With the Gulf oil slick spreading, these 5 business owners are among the thousands fearing for their livelihood. More
Jobs: Best gain in four years
Employers add significantly more jobs than expected in broad-based gains, but unemployment rate still edges higher. More
NYSE CEO explains selloff
NYSE Euronext CEO, Duncan L. Niederauer, says his exchange slowed trades of stocks including 3M, Accenture and P&G during the 998 point drop. Play
Overnight avgs
30 yr fixed mtg5.02%
15 yr fixed mtg4.29%
30 yr fixed jumbo mtg5.77%
5/1 ARM3.69%
5/1 jumbo ARM4.48%

Find personalized rates:
 

Rates provided by
Bankrate.com.
< !--include virtual="/fn_adspaces/personal_finance/credit_debt_mgmt/rate_box/text1.260x25.ad"-- > < !--include virtual="/fn_adspaces/personal_finance/credit_debt_mgmt/rate_box/text2.260x25.ad"-- >
-->

Job report better than it looks
ECRI's Lakshman Achuthan says April?s strong job growth shows business confidence and the resilience of the U.S. economy. Play
Spend student loan money wisely
Students should keep in mind that loans need to be paid back with interest when using the money for personal use. Play
Why Amish businesses succeed
Amish businesses have a 95% success rate at staying open at least five years, according to research. Play
Markets Last Change % Change
Dow 10,380.43 -139.89 -1.33%
Nasdaq 2,265.64 -54.00 -2.33%
S&P 500 1,110.88 -17.27 -1.53%
Treasurys 3.43 0.03 0.91%
U.S. Dollar 1.28 0.01 1.01%
Data as of 4:26pm ET
Company Price Change % Change
Citigroup Inc 4.00 -0.04 -0.99%
Bank of America Corp... 16.18 -0.10 -0.61%
Ford Motor Co 11.51 -0.27 -2.29%
Microsoft Corp 28.21 -0.77 -2.66%
General Electric Co 16.88 -0.43 -2.48%
Data as of May 7

Sections

Citigroup dismisses "rumors" that a fat-fingered trader triggered stock slide. More

Employers add significantly more jobs than expected in broad-based gains, but unemployment rate still edges higher. More

How founder Mark Zuckerberg resisted billion-dollar offers to sell. Inside the making of the world's most-coveted web giant. More

With the Gulf oil slick spreading, these 5 business owners are among the thousands fearing for their livelihood. More

Before you launch a young adult upon the world, share this advice on career, money, and love. More

Please create a screen name to access this feature.

Screen name (Select one with 3-12 characters; Numbers and letters only)


Forgot password

Enter your e-mail address below and we will send you an e-mail with a link and code to reset your password.

E-mail

Already have the reset code?

Password selection

E-mail

Reset code

New password

Log in & let's get started!

E-mail

Password

Forgot password?


Not a member yet?

Sign up now for a free account

Sign up or log in

Screen name

Select one with 3-12 characters;
Numbers and letters only

E-mail

Make sure you typed it correctly.
You will receive an e-mail to validate your account

Password

Make it 6-10 characters, no spaces

We're Sorry!

This service is temporarily unavailable. Please try again soon.


 

 


Thanks!

Please check your e-mail and click the link to confirm your membership. Then, you'll be ready to participate in all activities and conversations on our site.

Go to your Profile page


© 2010 Cable News Network. A Time Warner Company. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy. Advertising Practices.
Home Portfolio Calculators Contact Us Newsletters Podcasts RSS Mobile Widgets Site Map User Preferences Advertise with Us
Magazine Customer Service Download Fortune Lists Reprints Career Opportunities Special Sections Conferences Business Leader Council
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer
LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer.
Morningstar: © 2010 Morningstar, Inc. All Rights Reserved. Disclaimer
The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2010 is proprietary to Dow Jones & Company, Inc
Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.
FactSet Research Systems Inc. 2010. All rights reserved.