By Jennifer Glickel and Michael Ventura
DNAinfo Staff
FINANCIAL DISTRICT — Did one fat finger cause panic on Wall Street?
After one of the most volatile days in trading history that saw the Dow Jones Industrial Average plummet nearly 1,000 points in minutes Thursday, conspiracy theories abound as to whether the drop was caused by panic selling on the trading floor or a mysterious “fat-fingered” trader who accidentally keyed in an enormous order.
Reports indicated that a Citigroup trader might have mistakenly hit a “b” instead of an “m” in a trade involving Procter and Gamble, CNBC reported.
Citigroup stated it was investigating the cause of the drop but said it had no evidence the company was involved in the erroneous transaction.
Officials are looking at a two-minute window in which 16 billion futures contracts known as “E-mini S&P 500” futures were sold.
"It became a frenzy," Brad Pine, a Manhattan investment adviser, told the News.
The markets continued to prove unstable Friday, with the Dow Jones average down more than 175 points, or 1.7 percent, at midmorning, the New York Times reported. The S&P 500 stock-index fell by more than 21 points, or 1.9 percent, while the Nasdaq declined by more than 54 points, or 2.3 percent.
Within five minutes on Thursday, the Dow dropped 997 points shortly after 2 p.m. to below 10,000 for the first time since February, and then by 3 p.m. had recovered more than 600 points of that decline. The S&P 500 index and Nasdaq followed suit, with the Nasdaq at one point down more than 9 percent.
Some Wall Street watchers said the automation of stock market trades may have accelerated Thusday's drop.
“We have a market that responds in milliseconds, but the humans monitoring respond in minutes, and unfortunately billions of dollars of damage can occur in the meantime,” James Angel, a finance professor at Georgetown University, told the New York Times.
At the close of trading on Thursday, the Dow was down 348 points, or three percent.
The euro slid to a 14-month low at at $1.2598 to the dollar and yields on 10-year treasury notes had their biggest drop since September 2008.
Traders overseas were optimistic things would be better today.
"There could be a bit of a rally, but people are going to be very cautious," Michael Hewson from CMC Markets in London, told the Wall Street Journal.
