As losses piled up, the Dow went into freefall, tumbling through 10000, before dropping as much as 998 points, or 9.2%. The biggest closing point drop in the Dow’s history occured on Sept. 29, 2008, at the height of the financial crisis, when the Dow ended the day down 777.68 points, or 6.98 percent.
The Dow has since pared its losses but remains sharply lower, down 492 points, or 4.45 percent. The S&P500 tumbled 4 percent, to 1,120 and at one point dropped as low as 1065.79.
Technicians said the market blew through key support on the S&P 500 at the 1150 level and then again at 1120 and 1115.
Key short-term credit markets—such as the market for three-month Libor—began to show signs of stress and corporate bonds tumbled.
With about an hour of trading to go, New York Stock Exchange composite volume has already topped eight billion, making this the second-busiest day of the year in the market. The 2010 high was 8.4 billion shares, set on April 16 when the government filed fraud charges against Goldman Sachs.
Traders described Thursday’s trading as driven largely by automated sell orders, which piled up after several technical barriers were breached, in particular the 1150 level on the S&P.
The massive government spending the Obama administration has embarked on will not improve this at all.
And wait until inflation sets in.
UPDATE
Mr. President: Unplug the F*ing Computers (h/t Brian.)
Stock Selloff May Have Been Triggered by a Trader Error
According to multiple sources, a trader entered a “b” for billion instead of an “m” for million in a trade possibly involving Procter & Gamble [PG 60.75 -1.41 (-2.27%) ], a component in the Dow. (CNBC’s Jim Cramer noted suspicious price movement in P&G stock on air during the height of the market selloff. Watch.)
Sources tell CNBC the erroneous trade may have been made at Citigroup [C 4.04 -0.14 (-3.35%) ]
