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Typo may have spurred Dow's near 1,000-point drop

A computerized sell-off possibly caused by a simple typographical error triggered one of the most turbulent days in Wall Street history Thursday and sent the Dow Jones industrials to a loss of almost 1,000 points, nearly a tenth of their value, in less than half an hour. It was the biggest drop ever during a trading day.

The Dow ended down 347.80, or 3.2 percent, at 10,520. It recovered two-thirds of the loss before the closing bell, but that was still the biggest point loss since February 2009.

The Standard & Poor's 500 index, the index most closely watched by market pros, fell 37.75, or 3.2 percent, to 1,128.15. The Nasdaq composite index lost 82.65, or 3.4 percent, and closed at 2,319.64.

The impact of the gyrations on some stocks was breathtaking, if brief. Shares in consulting firm Accenture fell to 4 cents after closing at $42.17 on Wednesday. The stock recovered to close at $41.09, down just over $1. Procter & Gamble, generally a stable stock, dropped as much as $23, almost 37 percent, and rallied to close down only $1.41.

The Dow's lightning-fast plummet sent chills down investors' spines.

"Today . . . caused me to fall out of my chair at one point. It felt like we lost control," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

At its lowest Thursday, the Dow was down 998.50 points, just shy of the 10 percent drop that would have triggered a halt in trading under circuit breaker rules adopted by the New York Stock Exchange after the 1987 market crash.

No one was sure what happened, other than automated orders were activated by erroneous trades. One possibility being investigated was that a trader accidentally placed an order to sell $16 billion, instead of $16 million, worth of futures, and that was enough to trigger sell orders across the market.

No one was taking blame, either. The NYSE said there was no problem with the Big Board's systems, and all the markets were on a conference call with the Securities and Exchange Commission.

Nasdaq issued a statement two hours after markets closed saying it was canceling trades executed between 2:40 and 3 p.m. that it called clearly erroneous. The NYSE said it doesn't expect to cancel any trades.

In a statement, the SEC said regulators are reviewing what happened and "working with the exchanges to take appropriate steps to protect investors."

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