Said to have been initiated by errant trades, several U.S. indices experienced the largest intraday drop today since the crash of ‘87. Between 2:40 p.m. and 2:50 p.m. EST, the Dow Index plunged 998.5 points, or 9.2%, while the S&P fell 8.6%.
Many market spectators commented that they had heard a major firm accidentally released a program to initiate a $16 billion sale of e-minis, when they actually meant to sell $16 million. This one mistake was thought to have spurred contagion, prompting computer-initiated sales market wide.
Further fueling the panic caused by the abrupt decline were images of Greek mobs protesting austerity measures taken by the Greek government in compliance with their bailout.
In response to the market dip, investors worldwide started buying into precious metals and other more stable assets. Gold reacted to the decline by increasing at total of $28.20 to close at a net change of $22.30, or 1.9%. Palladium and Platinum futures experienced a similar, albeit not quite as dramatic increase as well. Precious metals investors claim this is a direct reaction to both U.S. market turbulence and insecurity about Greece.
Currency markets were also agitated by this drop. Euro flight was observed while investors re-located funds to the U.S. dollar, Japanese Yen, and Swiss Franc.
Both indices were able to recover most of the decline before the end of the day.