Electronic trading is being blamed for the momentary plunge in the U.S. stock market that saw the Dow Jones Industrial Average dropping by 998.50 points, reveal news reports.
The Wall Street Journal notes that "the Dow eventually rebounded to close down 347.80 points, or 3.2%, at 10520.32, its worst percentage decline since April 2009." The Journal adds that at one point, stocks of Dow component Procter & Gamble plunged 37%.
Big4.com also reveals that for a brief period of two minutes, Accenture's stock dropped to one cent per share. "The culprits seem to be some mysterious program trade or glitch in the exchange computer systems," says Big4.
The Wall Street Journal reported that at least seven other stocks in the Standard & Poor's 1500-stock index also plummeted to a price of one cent per share, which was essentially a 100% decline.
Citing Larry Leibowitz, the chief operating officer of NYSE Euronext, Bloomberg reports that while the Dow's plunge may have reflected normal trading, "the selloff snowballed because of orders sent to venues with no investors willing to match them."
“The fact that it snapped back so quickly made it clear that it was an aberration,” Leibowitz told Bloomberg.