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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
 Posted - 05/08/2010 : 06:05:57
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$1 Trillion Wiped Out Before Rebound
In a matter of seconds, $1 trillion in equity -- a figure equivalent to 7% of U.S. gross domestic product -- was wiped out by Thursday trading before the market rebounded.
Citigroup was investigating reports that one of its traders erroneously placed a trade in a derivative tied to the S&P 500 in an amount 1000 times larger than he had intended, which could have dramatically exacerbated the nose dive. Once the freefall began, an avalanche of automatic computer-driven sell orders was unleashed across electronic markets, accelerating the rout.
In some cases, the trading activity was completely absurd. Accenture (ACN), a $40 stock, briefly traded at a penny per share. Boston Beer Company (SAM), the maker of Sam Adams beer, also briefly lost all of its value -- meaning that it was worth nothing -- after starting the day above $60 per share. Tobacco giant Philip Morris International (PM), which had opened at around $48 per share, briefly bottomed out at $2 per share. Other securities, including Exelon (EXC), Radian Group (RDN) and Centerpoint Energy (CNP) also saw their stock values vanish in a matter of seconds.
The Wall Street Journal reports that "the $9.5 billion iShares Russell 1000 Value Index Fund went from $59 to around 8 cents in the blink of an eye." WSJ.com's Matt Phillips put together a list of stocks that lost their entire value before rebounding. Aside from the aforementioned Exelon Corp., Boston Beer and CenterPoint, the list includes Eagle Materials (EXP), Brown & Brown (BRO) and Iowa Telecommunications (IWA). All six of those stocks can be found on the Nasdaq list of cancelled trades.
See full article from DailyFinance: You must be logged in to see this link.
this explanation makes no sense. most or all of those companies are not in the S&P 500. Something funny was going on.
if it was a general market crash, it would not have begun with these obscure companies but rather the most widely followed companies. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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How the Market Meltdown could have occurred
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