Dow's wild ride

Dow's wild ride


NEW YORK (CNNMoney.com) -- In one of the most gut-wrenching hours in Wall Street history, the Dow plunged almost 1,000 points Thursday, before recovering some, as on a technical glitch in the trading of Procter & Gamble stock and fears about the European debt crisis spreading.

The selling was exacerbated by a huge drop in Dow component Procter & Gamble (PG, Fortune 500). There may have been technical glitches which caused it to plunge 37% in minutes. P&G's slump was responsible for 172 points of the 992.60 the Dow initially lost.

The Dow Jones industrial average (INDU) lost as much as 992.60 points in volatile trading, the biggest one-day point decline on an intraday basis in Dow Jones history.

At 4:00 p.m. the Dow was down 348 points, or 3.2%. The Dow's biggest one-day point selloff on a closing basis was Sept. 29, 2008, when it fell 777.68.

The S&P 500 index (SPX) slipped 38 points, or 3.3%. The Nasdaq composite (COMP) dropped 82 points, or 3.4%.

"On the Dow we were down 400 to 800 points in five minutes, it was horrifying," said Art Hogan, chief market strategist at Jefferies & Co. "We're not down 1,000 points anymore, but we collapsed some major support levels."

Beyond the P&G glitch, the selling pressure of the last few days has been more technical than fundamental, said Hogan.

"It's a knee-jerk reaction to the continued problems in Europe, Greece in particular, possibly Portugal, Spain, the U.K.," said Ted Weisberg, NYSE Floor trader, Seaport Securities.

Weisberg told CNN that a glitch in the trading of Dow component Procter & Gamble (PG, Fortune 500) played a role. P&G stock plunged as much as 37% during the selling before recovering.

Gold spiked above $1,200, the euro plunged to a more than 1-year low against the dollar and oil prices fell, having already been vulnerable to the Gulf oil spill. Bond prices rallied, sending the corresponding yields lower as investors sought safety in government debt prices.

The CBOE Volatility (VIX) index, Wall Street's so-called fear gauge, spiked to a fresh high above 36, according to early tallies, closing at the highest point in a year.

Here's a look at what was moving the market earlier.

European debt problems accelerate: Stocks have been sliding on and off for the last two weeks as investors mull the ramifications of the growing debt crisis in Europe. While European leaders have pledged to provide Greece with $146 billion in loans over the next three years, attempts by the nation to institute certain "austerity" measures to bring down the deficit have sparked riots and other violent outbursts.

Meanwhile, investors are concerned that the size of the bailout will make Europe less able to help Spain, Portugal and other debt-plagued nations. The so-called PIIGS also include Italy and Ireland.

"There's no question that Europe and Greece and specifically the fear of contagion is what's driving the market lower," said Hank Smith, chief investment officer at Haverford Investments.

"Having said that, we also have to be cognizant that the market was due for a pullback at a minimum, and possibly a correction," he said.

He noted that the market hasn't had a correction - technically defined as a selloff of 10% on a closing basis - for at least 14 months.

The euro plunged to a fresh more than one-year low versus the dollar Thursday, pressuring dollar-traded oil prices. Oil prices and energy stocks were also vulnerable in the aftermath of the Gulf oil spill.

A slew of good but not great retail sales reports from the nation's retailers, a report that showed weekly jobless claims dropped were also in focus.

source: cnn.com