Wall Street Journal: DJIA Slides Under ‘Flash Crash’ Low
GDP and unemployment are much more important when it comes to measuring the state of the economy, but the Dow Jones Industrial Average is a media-friendly, constantly-changing index. And so it was big, big news when the Index dropped 1,000 points back in May. Remember that? People blamed the fall on an accidental trade. Someone hit ‘b’ for billion instead of ‘m’ for million, and it triggered a mini-panic? No such excuse this time, and yet the drop-off was worse because there wasn’t an influx of last-minute buyers to salvage the drop:
Stocks fell on Monday in a late-day selloff that took the Dow Jones Industrial Average below its lows of the May 6 “flash crash.”
The Dow ended down 115.48 points, or 1.2%, at a seven-month low of 9816.49 and below 9869.62, its low-point of the May 6 slide. That day, buyers rushed into the market at that level, helping pare a 1,000-point drop to a decline of 347.80 points.
But on Monday, no such buying appeared.
Meanwhile the Euro is down (thanks to fears about Hungary being next in line after Greece) and gold is continuing to soar. Corrections are an inevitable part of any strong return, but this isn’t a strong return or a correction. It looks more like the sputtering sounds coming from your car that might make you afraid the engine is about to give out.