Dow Jones Takes a 900 Point Plunge


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Business stock market news: Dow Jones Index, 900 point plunge

The Dow Jones took a no-holds barred nosedive some 900 points in the blink of an eye. Between one and two o'clock this afternoon, panicked traders were pushed over the edge by a fall in the Dow Jones Industrial Average - first dipping 500 points, then 600, 700, 800 and then finally 900 points. At its lowest point, the Dow was below the 10,000 mark, and experts are calling it 'the biggest intraday loss for the Dow since the market crash of October 1987'. At today's low, the SP 500 index (SPX) was down 63 points, and the Nasdaq composite (COMP) was down 127 points.

It wasn't long before the Dow began to rebound like a bungee cord; a little over an hour later the Dow was down 'just' 481 points. The Dow closed at 10,519; down 348 points for the day.

The market's three day decline, including Thursday's sudden drop which appears to have been caused by a high-speed trading glitch, was most likely exasperated by the debt crisis in Greece. Greece made headlines recently when civilians died in Athens riots that where a response to newly imposed 'austerity measures' (a nice way of saying raised taxes and slashed salaries). The European Union recently bolstered the deteriorating economy with $146 billion in loans to be paid out over the next three years. Prior to this bailout, investors where demanding over 15% annually for 2-year government bonds from the cash-strapped nation with a poor credit rating. Perhaps there is something to be said about the fragility of global-credit markets when a relatively small nation can rock global markets, including our own. Greece's GDP is roughly equivalent to 3% of US GDP.