Thursday, May 6, 2010

Dow Sheds 350 in Wild Selloff - Wierd Things Are Happening

See what liberal policies can do for the whole world economy. You just can't give everything to everybody and expect those who are left to pay for it. There is no one left.

Stocks staged one of the most dramatic selloffs in market history Thursday as what may have been a trader error exacerbated losses in a market already jittery about the European debt crisis.

The Dow ended down 347.80, or 3.2 percent, at 10,520.32, after being down as much as 998.50 earlier, the Dow's biggest intraday drop on record. Treasurys surged.

Under current, New York Stock Exchange rules, if the market falls ten percent or more between 2:30 and 3:00 pm ET, trading is halted for 30 minutes. At its worst point, the Dow was down between 8 and 9 percent today.

The S&P 500 shed 3.2 percent, while the Nasdaq lost 3.4 percent. The CBOE volatility index, widely considered the best gauge of fear in the market, was around 34 at the closing bell, after being above 40 earlier. The VIX ended last week around 22.

All this fogginess about botched trades came as the market was already on edge about Greece and the European debt crisis.

Just before the panic started, which was around 2:30pm ET, Mohamed El-Erian said on CNBC that the Greek crisis is about to spread.

"We've seen a crisis start in a country—Greece—become regional, impact the whole of the Euro zone and is on the verge of truly going global," said El-Erian, CEO of the world's biggest bond fund.

Rochdale analyst Dick Bove said the riots in Greece, which escalated after the Greek austerity bill was passed, are also a telling sign.

"There is simply a growing recognition that Greece has got to default, said Rochdale banking analyst Dick Bove. "The riots in the streets showed the decision to repay the debt was not going to be made by the people in Germany, France and Switzerland, it's going to be made by people in Greece and they're not going to repay it," he said. "Anyone seeing the riots is going to recognize that this government is going to be thrown out and anything replacing this government is going to be far more leftist leaning and they're going to repudiate."

Read entire WSJ report "Dow Sheds 350 in Wild Selloff" here

No comments:

Post a Comment