The Dow had a harrowing half-hour where it dropped almost 1,000 points. As quickly as it dropped, it rebounded around 600 points to eventually closed down 347.80 points. A single errant trade is believed responsible for the sparking the mass sell off. A number of deals that took place during the window will be unwound.
"At its afternoon low, the Dow had plummeted 998.50 points, its biggest intraday point drop ever. The swing from its intraday high was 1,010.14 points.
The Dow eventually rebounded to close down 347.80 points, or 3.2%, at 10520.32, its worst percentage decline since April 2009. Stocks from Dow components Procter & Gamble and 3M suffered precipitous declines. At one point shares of P&G tumbled 37%.
Representatives of major U.S. exchanges and the Securities and Exchange Commission convened an emergency conference call late Thursday to examine potentially erroneous trades in multiple stocks. The trades took place between 2:40 p.m. and 3:00 p.m. EDT, according to a notice from Nasdaq OMX Group Inc. Officials late in the day said any trades that were 60% away from the market price at 2:40 p.m. would be canceled.
About 300 stocks are expected to see canceled trades, but it is unknown how many trades would be broken. No exchange admitted on the conference call that it had seen trades mis-keyed into their systems, one exchange official said.
Traders theorized that an initial trading error triggered a piling-on effect from computerized trading programs designed to sell when the market moves lower. At the same time, pre-set orders form individual traders and investors to sell on declines during market downturns were likely triggered."