Independent, Fee-Only Financial Advisor
Thursday, May 06, 2010
Stocks plunged today in a flashback to the panicked trading of 2008. Selling progressed late in the day due to a wave of automated sell orders that turned a nasty drop into a full-blown market upset. At its afternoon low the Dow Jones Industrial Average was down almost 1,000 points, hurt by sharp drops in Procter & Gamble, 3M and other companies that traders said were subject to heavy selling by so-called black boxes or automated trading systems. The Dow recovered much of that loss but still suffered its largest one-day drop since February of 2009. The velocity of the plunge in stocks was astonishing. Investors deserted stocks, risky bonds and commodities and poured money into safe assets like U.S. Treasurys and gold. While there are rumors of trading errors that could have sparked the markets downfall, there is no official word on exactly what caused this unforeseen event. DJIA -347.82 Nasdaq -82.65 S&P 500 -37.75.