Computers that calculate the DJIA at Dow Jones are fingered as the culprit in yesterday’s late-day freefall of 200 points. The Wall Street Journal, published by Dow Jones, covers it in gory detail in a cover story in today’s paper.
Behind the scenes, the team that compiles the DJIA had noticed at about 2 p.m. that heavy trading volume was overwhelming the system, creating a data backlog that was affecting all of the Dow Jones indexes.
The Dow’s component stocks were falling, but — improbably — the Dow average wasn’t falling as much. Just before 3 p.m., the team switched over to a backup computer system. Almost immediately, the Dow caught up, tumbling 200 points, for an eye-popping plunge on the day of more than 500 points.
You could probably hear the “hiss” coming out of the world economy as all those Sell orders got matched up and executed. How would you like to be the dude at his console that threw that switch?
4.07 billion shares traded hands yesterday. The heaviest trading day ever for the New York Stock Exchange