Part of Tuesday's stock plunge was due to a very brief computer glitch that occured when the Dow moved to backup computers and the market plunged nearly 200 points instantaneously.
A computer glitch triggered a sudden plunge in the Dow Jones industrial average at mid-afternoon Tuesday, turning an already bad day in stocks into a head-turning spectacle.
Dow Jones & Co., the media company that manages the well-known index of 30 blue chip stocks, said it discovered shortly before 2 p.m. that its computers weren't properly handling the day's huge volume in trades at the New York Stock Exchange.
It switched to a backup computer, and the result was a massive swoon in the index as the secondary system took over processing shortly before 3 p.m.
The Dow plunged about 200 points almost instantly, and was down as much as 546 points - its worst single-session decline in more than five years, and one that sent the blue chips into negative territory for the year.
"I've never seen a collapse like that, and I've only been doing this for 47 years," said Alfred E. Goldman, chief market strategist at A.G. Edwards & Sons Inc.
CyberNet News reveals another recent glitch on the Nasdaq that showed stocks selling at $100,000 per share. The Wall Street Journal has an interesting map of Tuesday's stock drop that shows how the stock market has become a global market.
