When the Dow Jones industrial average plunged to its low of the session Tuesday, it happened with incredible swiftness — a matter of seconds — because of a computer glitch that kept some trades from being immediately reflected in the index of 30 blue chip stocks.
Dow Jones & Co., the media company which manages the flagship index, said around 2 p.m — just two hours before the New York Stock Exchange was to close — it was discovered computers were not properly calculating trades. The company blamed the problem on the record volume at the NYSE, and switched to a backup computer.
The result was a massive swoon in the index that happened in the seconds it took Dow Jones to switch to its secondary computers.
“The market’s extraordinary trading volume caused a delay in the Dow Jones data systems,” said Dow Jones spokeswoman Sybille Reitz. “We decided to switch over to the backup system, and the result was a rapid catch-up in the published value of the Dow Jones industrial average.”
Spokesmen for the NYSE Group Inc. and Nasdaq Stock Market Inc. could not immediately confirm if all closing share prices were valid. A spokesman for the Big Board said it experienced “intermittent delays and are currently assessing the situation.” The Nasdaq said it was “confirming” the closing numbers.
The Dow plunged about 200 points in a matter of minutes, and dropped as much as 546 points — its worst decline in more than five years, and one that sent the blue chips into negative territory for the year.
The Dow closed down 416.02, or 3.29 percent, at 12,216.24.