Wall Street trading yesterday, undoubtedly, will be included in history textbooks under the title of the next “black thursday”: in a few minutes, the Dow Jones fell by almost 1000 points, index S&P 500 lost immediately 8,6%, the newspaper writes “Vedomosti”.
According to Wilshire International, doing statistics on Wall Street, behind 15 minutes the market lost more than 1 trillion dollars. “It was the largest drop in the Dow Jones industrial average in its history.”, – notes CNN Money website.
News, concerning Greece and the passivity of the ECB, have already been won back by the market to 14.42 local time in the USA, when the index suddenly peaked. TO 14.47 Dow Jones Industrial Average fell to the level of 10 000 points, having lost 998,5 item. Prior to that, the most significant drop in a day in the history of the index was 29 September 2008 of the year, when the Dow Jones flopped on 777,68 item.
Many stocks are suddenly devalued. So, securities Accenture PLC or Boston Beer Co. lost almost 100% its value: they were given for a penny. Index funds, shares of which are traded on the stock exchange, evaporated instantly. For example, shares of the iShares fund Russell 1000 Value Index Fund, whose capital was 9,5 billion dollars, fell in price since 59 dollars to 8 Cents. Procter Promotions & Gamble, one of the most stable “blue chips” on the market, lost in two minutes 35% cost. “Everything happened so fast, as if a torpedo flew. It was hell”, – says senior strategist at T3 Capital Management Scott Redler.
TO 15:07 the market has already played back 500 points and closed at 347 points below the previous day.
The U.S. Securities and Exchange Commission jointly with the Commodity Futures Trading Commission announced, what will be investigated “unusual trading activity”. The largest stock exchanges in the country are trying to find failures in trading systems or detect possible mistakes of traders. The New York Stock Exchange noted in a statement, that there were no technical failures in her system, which could trigger a stock dump.
Some exchanges are considering canceling yesterday's trading results. So, Nasdaq said last night, that all bidding, taken between 14.40 And 15.00, “which passed for the amounts, on 60% more or less than the value of the financial instrument by 14.40”, will be considered invalid. “The decision cannot be appealed”, – stated in Nasdaq. They will do the same on NYSE Arca.
By the evening, a version appeared, that the market was sent into a tailspin trader Citigroup due to random error. “Everyone assumed, that the Dow Jones crash on 998 points Thursday afternoon reflected epidemic-spreading fears of a possible default of Greece's sovereign debt. But as the market recovered closer to the bell at the close, the rumors became much more worrisome. – a trader on the main dealing desk accidentally entered a command to sell futures on 16 billion dollars instead of 16 million dollars, as he wanted it, plunging the market into chaos”, – writes the Forbes website. I.e, Citigroup trader, e-bidder, mixed up the first letter in words “billion” And “million”.
However, Citigroup has already released a statement, which says, what “they have no proof, that Citi was involved in any faulty transactions”.
Some analysts admit, that the market collapse could have been triggered by one of the major players. For example, firms, using computer programs, to make huge trading volumes in seconds, could accelerate the overall decline.
