NEW YORK (Dow Jones) – guesswork and speculation about what triggered the spectacular course antics on Wall Street on Friday to rule the world in financial markets. Was it at first, the crisis in Greece and the sometimes violent protests by the public against the adopted austerity program of the Greek government were behind the crash, condensed in the course of conjecture, an erroneous entry and are out with massive sales responsive program trading cause. (Reuters photo:)
Wall Street in late trading on Thursday had sent shock waves across the globe, as the Dow Jones index in just under 30 minutes to 997 points and crashed to lay down one of the biggest point loss ever. At its peak, was the U.S. leading index decreased by about 9% to 9873 points. Then he recovered but also significantly to the level that he had previously held. It was the same with the other indices.
The U.S. Securities and Exchange Commission and the agency responsible for the futures and options markets, CFTC (Commodity Futures Trading Commission) published on Thursday a joint statement that they were working with stock exchanges and other regulatory authorities in an investigation of the "unusual trading activity". Once results available, these would be made public together with recommendations for action, said staff of the authorities.
The focus of speculation is the stock of Procter & Gamble, which crashed by another at the moment to below 40 USD, after the title had previously noted by 60 USD. According to the New York Stock Exchange (NYSE) each share for a so-called "Circuit Breaker" value. Is below this threshold, the title could be traded on any stock exchange or trading at any price. After Procter & Gamble had been killed in these "Circuit Breaker" value of the Nasdaq at $ 39.37 a purchase request is received.
A blue-chip value, such as Procter & Gamble rush without a kursbewegende message is not decreased by such a measure, Frank Ingarra, co-portfolio manager at Hennessy Funds said. All algorithms of the program, dealers had jumped on these "misguided thing," said Ingarra further. "There must have been irregular things in the game," said another operator. "Procter is a defensive stock, because an output shaft makes no sense," said the expert.
Numerous observers market claims to be brought to my attention that a larger company – apparently the Citigroup – may have accidentally on the wrong trade program, the special at the Chicago Mercantile Exchange (CME) traded using futures contracts. The CME Group announced after the interim crash of U.S. stock exchanges that there were no irregular trading activities. The communication from the futures market is, the market activity of Citigroup does not appear to have been irregular and not unusual.
Market observers suspected as the cause behind the unusual ups and downs a computer error or a so-called "fat finger trade" – that is the spelling of a person. There is speculation that Citigroup is a dealer mistakenly 16 billion instead of 16 million shares of Procter & Gamble have offered for sale, after which the descent began on a broad front. A spokesman for Citigroup said that he had no evidence that his house was involved in such a Fehlhandel.
It is difficult to say whether the original orders would have led to the other, the price movement would have been connected in the assumption that it is a real market movement, "says Adam Allam of Instinet, an operator of trading systems. Currently can only speculate about the reason the price turbulence. It is quite plausible that there had been simply an error.
Dealers reported the addition of unusual movements in Exchange Traded Funds such as the iShares Russell 1000 Value Index Fund (IWD), which is supported by almost 60 USD to 7.5 cents. Mathematics is such a downward movement can not be explained, says Ingarra.
The Nasdaq OMX Group has announced, however, to cancel a portion of the equity transactions from Thursday, where this is sought by the parties involved. to be void here between 14.40 und 15.00 clock time clock made statements in which it had given price variations of over 60% against the previous price of a stock. These concerns include stocks such as Accenture PLC and Boston Beer. Technical or system errors were not detected in connection with the crash course, the report said.
Even a spokesman for the New York Stock Exchange, meanwhile, joined a computer error as the reason for the incident off. There was neither an accident nor technical problems, he said.
Dealers see no reason to panic with regard to the German stock market on Friday. "The situation is not comparable with 1987," said one market participant. The fundamentals as published on Thursday March orders were good, and prompted a tightening of monetary policy as in 1987 did not exist.
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