Six hours of calamitous selling drove the Dow Jones Industrial Average down 554.26 points today and twice forced automatic halts in trading on the New York Stock Exchange - the first time the market has tripped all the so-called circuit breakers adopted after the 19 October 1987 crash.
It was the Dow's largest single-day point loss ever and, with a 7.18 percent loss, the 12th biggest percentage drop. Despite the truncated session, volume on the NYSE was 685.5 million shares, a record. On all exchanges, 1.778 billion shares traded, an aggregate volume topped only by that of last Friday's session.
The plunge was marked by heavy losses among big-name technology stocks and drove the Nasdaq Composite Index down 115.41 points - also roughly 7 percent - close to triple its previous record loss. Trading on that exchange was also halted.
The historic losses continued a global stock decline that began with a crash-rebound cycle in Hong Kong on Thursday and Friday and drove the Dow down 320 points in those sessions. Trading opened in New York today with word that Hong Kong had fallen 6 percent and other foreign exchanges were in decline. Trading opened down, but it wasn't until late morning that the plunge picked up speed.
Big-board trading was halted at 2:35 p.m. EST for 30 minutes after the leading index had fallen 354.37 points. The NYSE imposed the circuit-breaker rule after 1987's crash as a means of interrupting downward momentum. Last year, the threshholds of the circuit breakers were increased from the original rules.
When trading reopened at 3:06 p.m., the fall accelerated, the Dow declining nearly 10 points a minute. The exchange was shut for the day at about 3:25 p.m.
The drop even prompted a call from President Clinton for investors to calmly weigh the situation.
"The president has watched and noted the developments of the day," spokesman Mike McCurry told reporters at the White House. "... We want everyone to just take a deep breath and think about where we are. This is a market that has performed amazingly well ... so let's just be calm and reasonable."
In percentage terms, today's drop is still far smaller than the big 1987 event, in which the Dow fell 508.00 points from 2246.74, a loss of 22.6 percent. Today's drop from 7715.41 to 7161.39 was just one-third the magnitude in percentage terms. It was the biggest percentage drop, though, since an 8 percent fall on 26 October 1987, and, coming on the heels of last week's big Hong Kong-related drops, meant the Dow had shed 11 percent in just three sessions.
Among the big tech losers: Compaq, IBM, Intel, Bay Networks, Micron Technology, and Motorola.
One gem amid the wreckage: Apple Computer. Alone among 275 stocks tracked in the Federal Filings Technology Index, Apple rose on Dark Gray Monday. It closed at US$16.75, up 18.8 cents.
