A normal correction? A response to bad policy? Jitters about the war? A computer glitch?

[Skidmore]

What exactly happened with the stock market yesterday? I'm interested in hearing from those of you who understand this sort of thing. I'm just a lowly unemployed person with a vested pension plan hearing doom and gloom. What was this all about?

[PhilipShore]

1. Possibly could of been a terrorism act -- See Feb. 28, 2007 Jerusalem Post article

Jerusalem Post
Updated Feb. 28, 2007
http://www.jpost.com/servlet/Satellite?cid=1171894537514&pagename=JPost%2FJPArticle%2FShowFull


Cyberspace as a combat zone: The phenomenon of Electronic Jihad

[Ghost Dog]

7. This is a complete red-herring, sorry

(and probably a deliberate psy-ops job).

See more sensible thoughts below.

[PhilipShore]

12. AP: $632 billion was lost in total in U.S. stocks on Tuesday, according to Standard & Poor's Corp

The 632 billion $$$ computer glitch.

Stocks have worst day since 9/11 attacks

2/28/2007
By MADLEN READ
The Associated Press

NEW YORK (AP) — Stocks had their worst day of trading since the Sept. 11, 2001, terrorist attacks Tuesday, hurtling the Dow Jones industrials down more than 400 points on a worldwide tide of concern that the U.S. and Chinese economies are stumbling and that share prices have become overinflated.

The steepness of the market's drop, as well as its global breadth, signaled a possible correction after a long period of stable and steadily rising stock markets that had not been shaken by such a volatile day of trading in several years.

The repercussions continued Wednesday in morning trading in Asia. Shares in Tokyo, Hong Kong, Australia, New Zealand, the Philippines and Indonesia all tumbled more than 3 percent. The region's biggest bourse, the Tokyo Stock Exchange, saw its Nikkei 225 stock index fall 644.85 points, or 3.56 percent, to 17,475.07 points.

The drop hit every sector across the market, and a total of $632 billion was lost in total in U.S. stocks on Tuesday, according to Standard & Poor's Corp.Riskier issues such as small-cap and technology stocks suffered some of the biggest declines, but big industrial companies, those that are often hurt the most in an economic downturn, also were pummeled, with raw materials producers among the hardest hit.

http://www.mlive.com/newsflash/business/index.ssf?/base/business-2/1172622541240210.xml&storylist=business

[ktlyon]

2. We will know more when the markets open today

Check the Chinese stock market they may be bringing the world markets down with their recent over exuberance

[muriel_volestrangler]

3. It was started by a sudden fall in Shanghai

though that index has since recovered some of that fall, European indices are down about 1% after about 3 hours trading:

Chinese stocks recovered Wednesday following their worst plunge in a decade as regulators shifted into damage control, denying rumours of plans for a 20 per cent capital gains tax on stock investments.

The Shanghai Composite Index gained 3.9 per cent to 2,881.07 after opening 1.3 per cent lower. On Tuesday, it tumbled 8.8 per cent, its largest decline since Feb. 18, 1997.

http://www.cbc.ca/money/story/2007/02/28/shanghai-market-070228.html

A global stock sell-off has moved into a second day, after a wobble in China sparked fears of a big price correction and hit UK, Asian and European indexes.
The UK's FTSE 100 index shed 1% in morning trading. That took declines in the past two sessions to 3.2% and knocked £52bn off its total value.

France's Cac 40 shed 1% and Germany's Dax lost 1.1%. Earlier, markets had dropped in Asia, Australia and India.

Investors are questioning the outlook for economic and earnings growth.

The falls come after stock prices and indexes have climbed to record levels in a number of key world markets.

http://news.bbc.co.uk/1/hi/business/6402915.stm

[sendero]

4. The market..

.... has been looking very weak for some time now. It was looking for an excuse to sell off, and it got one from Shanghai, where the correction they suffered was apparently long overdue.

Greenspan's recession comments didn't help. The ongoing housing unwinding, even though poo-pooed by economists who claim "it isn't having any effect on the economy overall" isn't helping either.

The markets are jittery, and I suspect they will be for a while.

[GreenZoneLT]

5. Nobody knows

Stock prices fluctuate; that's what they do. Anyone who claims they can explain why the market made a short-term move on any given day is lying. And if they claim they can tell you what it will do TOMORROW, they're either a con man or off their meds.

[salin]

6. while you are correct, the reasons listed by the OP were

all in news stories about the decline, last evening. I didn't hear or read about the decline until I got home hours after the market closed - plenty of time for the media to start putting out 'explanation stories'. I read about a correction. I read about a tech glitch and move to a backup computer system (but this seemed to be tied to index funds reporting not the overall market - so it doesn't seem related but was offered as an explanation) and I read about a sell-off started in China. I even heard a comparison on NPR to the big drop day back in October 1997. Seems to me it was a much bigger deal when there were days in a row of big sell-offs in mid 2002 after the world com collapse.

[izzie]

8. Since China counts on our buying it is interesting

I think one needs to know a lot more because so many things feed into it all. I would think that if China thinks something will happen to its big market USA that they would do as they are doing now. Watching their money. I myself think the Middle East is going up in flames. Congress will not pull the plug so China who backs it with so much debt loans is watching their interest. That is their interest on their loans. As with the USSR we will spend our way into failing. Buying arms we do at home. It is big business. Goods or other types do not sell well in wars. I think it is only time before China pulls the plug on us any how but I am sure they would like to bleed even more of our tax payers interest money from us along with selling some more goods. What country can live in debt and wars forever?

[Ghost Dog]

10. Yes. And check out yesterday's DU Stock Market Watch

eg. start here: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=2747783&mesg_id=2748473

(and today's once it's open, of course - see LBN).

[salin]

11. gonna have to check both when I get back from work tonight.

[Ghost Dog]

9. As for the "tech glitch and move to a backup computer system",

this may have taken place (though it would be more likely, I think, that extra backup processing power was added to the system, rather than replacement.

The FT (Financial Times) ths morning, however, in the only reference I've seen so far, asserts that NYSE "Curbs" were placed on the market:

NYSE curbs fail to arrest Dow’s tumble

The Dow Jones Industrial Average on Tuesday suffered its steepest one-day decline in more than five years as hedge funds and other traders of large blocks of shares struggled to cope with curbs put in place by the New York Stock Exchange. Those curbs were designed to encourage orderly trading.

Such so-called “circuit breakers” have been used by the US stock exchange during previous sharp market declines.

These can potentially bring trading to a halt. But because the worst of the plunge on Tuesday took place after 2.30 pm, the NYSE did not halt trading. Instead, at 1.03pm the NYSE introduced what it calls a trading collar. Such measures are introduced in the event of a 180-point decline in the NYSE composite index, and ensure that all large block orders of the S&P 500 stocks must be “stabilising” for the remainder of the day – meaning that they can take place only after an “up-tick” in the stock. It will be removed at the start of trading today, but it remained in place until the close of trading on Tuesday.

Trading collars can be removed if the index moves back to within 90 points of the previous day’s close, but that did not happen yesterday.

“Normally, when circuit breakers kick in to stop us from selling, we get a bounce,” one trader said. “However, a whole queue of sell orders hit the system. That is not a good omen when the circuit breakers do not bring us back. We dropped in a matter of minutes. This is not supposed to happen.”

/...

Nevertheless, the trigger was the Chinese Govt's attempts to cool down China's very bubbly, overheating stockmarkets, in the context of very high levels, increasing weakness and, let's say, "irrational exuberance" in markets all around the world (except, perhaps, to a lesser degree, in Europe).

Greenspin's "recessionary" remarks on the US economy the other day certainly didn't help much; and Bernanke's Fed and Bush's Admin have a great deal to answer for provoking/promoting such a false, overly-liquid economy.