A record crash in US stock indices was triggered by a typo in a transaction, leading to significant losses.

Oleg 2010.05.07 03:47 #20981

in short, we're screwed...

Record crash in US indices triggered by typo

The record collapse of U.S. stock indices during trading on Thursday, May 6, may have been caused by an error by one of the bidders. Multiple sources told Reuters.

According to unconfirmed reports, the drop in indices was caused by a typo in a transaction with an unnamed traded index fund that pools the most attractive stocks. The transaction apparently took place on the Nasdaq exchange.

Some sources indicate that a Citigroup employee was involved in the incorrect data entry. This information is being verified, the bank said that so far they had no evidence that they were responsible for the erroneous transaction.

The Dow Jones index lost 3.2 percent or 347.8 points at the close of trading on May 6, stopping at 10520.32 points. Meanwhile shortly before 3 p.m. local time (11 p.m. Moscow time) the indices went down sharply, dropping 8.2 per cent, that is nearly 1,000 points. Such a drop within a single day has not been seen in the entire existence of the index. Part of the fall was recouped in the time remaining before the end of trading.

The S&P 500 index fell 3.24 per cent (37.72 points) to 1,128.15 points, while the Nasdaq lost 3.44 per cent (82.65 points) to settle at 2,319.64 points.

Related links
- Errant trade may have caused market plunge: sources- Reuters, 06.05.2010

And how many people died, it's scary to imagine...

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