Dow Drops 348 in Volatile Day

Market was down nearly 1,000 points in afternoon
By Nick McMaster,  Newser Staff
Posted May 6, 2010 3:19 PM CDT
Traders work on the floor of the New York Stock Exchange, Thursday, May 6, 2010, in New York.   (AP Photo/Henny Ray Abrams)
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(Newser) – Wall Street was in full panic mode today, as a drastic sell-off saw the Dow off nearly 1,000 points just one hour before the close, MarketWatch reports. A quick rebound followed, however, to less severe numbers. The Dow finished down 348 points at 10,520; Nasdaq fell 83 points to 2,320; and the S&P fell 38 to 1,128. For many traders, the chaotic freefall recalled the worst days of trading in 2008, when the wounds of the financial crisis were still fresh.

This time, however, the US economy seemed not to play a major role. Instead, fears of the financial state of Europe, driven by Greece's continuing debt problems, drove investors out of stocks and risky bonds and into safe bets like Treasuries and gold, notes the Wall Street Journal. The sell-off was exacerbated by software at trading firms that automatically sells to stem losses if the indices fall below certain points. Despite the semi-automatic nature of the stock rout, the NYSE stressed that no errors in its system played a role in the crazy plunge.

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