iON gives perspective on the Dow dip.
The Boston Herald
by Jerry Kronenberg
11 May 2010
Lawmakers plan to put Wall Street on the hot seat today to explain why the Dow Jones industrial average plunged nearly 1,000 points in just minutes last week.
“We want to know what caused a huge drop that obviously wasn’t justified by reality.” ~U.S. Rep. Barney Frank (D-Newton), whose House Financial Services Committee is holding a hearing on the Dow’s wild ride
The index fell by as much as 998.5 points during last Thursday’s session—its biggest intraday point loss ever. At one point, the Dow fell from about 10,400 to 9,870 and back again in minutes.
Experts theorize that either computer error or someone typing “billion” instead of “million” on a big order sparked the sell-off.
Top New York Stock Exchange, Nasdaq Stock Market and Chicago Mercantile Exchange executives plan to testify about the incident today before Frank’s committee.
The U.S. Securities and Exchange Commission and Commodity Futures Trading Commission’s chiefs also intend to appear.
Frank said he wants to know “what contributed to (the meltdown) and whether there’s anything we can do to make it less likely to happen again.”
“A 1,000-point drop in a matter of an hour—that’s not the way things are supposed to work.” ~U.S. Rep. Michael Capuano (D-Somerville)
Yesterday, the SEC met with top officials from the NYSE and other exchanges, who agreed to create marketwide “circuit breakers” to prevent future meltdowns.
