How can the market go, on a random Thursday afternoon, completely insane? The story which is emerging centers on old, boring Procter & Gamble, as can be seen in the PG chart from this afternoon.
Look at the volume chart: what you see here is a big block of shares trading in P&G at around 2:30, followed by another huge block right before the market crashed. And then, nothing. The two big blocks were probably sell orders, which were big enough to blow through all the bids in the market. As Henry Blodget says, “for a few minutes, buyers just disappeared”.
The WSJ reports that a trader may have accidentally placed an order to sell $16 billion in futures tied to stock indexes, when he meant to place the order for $16 million.
And there were “a number of erroneous trades” during the minutes when the market was plunging, a spokesman for the company that owns the New York Stock Exchange told Bloomberg.
The FT’s Alphaville blog points out that Procter & Gamble shares fell by more than 20 percent — about three times as much as the Dow — before regaining almost all of the ground it lost, and says the decline may have been related to a “technical screw up.” And Barron’s notes that shares in Accenture — which opened and closed the day above $41 per share — traded for one cent per share at one point today.
I smell a seven-figure bonus.