An investor stampede to the exits today illustrated to advisers and market strategists just how skittish the overall market has become.
The Dow Jones Industrial Average, which finished the day down 347 points, was briefly down 1,000 points at during the late afternoon.
Press reports now indicate the extreme market dip may now have been triggered by a technical error. Reportedly, a trader accidently put in a sell order for a billion shares — rather than a million — of Procter & Gamble. The reaction by investors, however, was not a mistake.
“We know that there's real palpable fear out there and at some point today it started to take on a life of its own,” said Max Bublitz, chief market strategist at SCM Advisors LLC, which has $3.5 billion under management.
“Slowly but surely people are clueing in to the fact that a bailout of Greece is a bailout of the European banking system,” he added. “And anybody who has been in risk assets for the past 10 years has already gotten severely burned.”
After watching the stock market gain 70% from the March 2009 low, a lot of investors were looking for a an excuse to take some profits, said Kevin Mahn, chief investment officer Hennion & Walsh Asset Management Inc., which has $250 million under management and supervision.
“I think it was a long awaited pullback that was exacerbated by the sovereign debt issues in Greece,” he said. “There was no news that could have triggered this and I don't think the market should have traded off as much as it did, but it also shouldn't have bounced back as much as it did since. March 9.”