Did human error cause wild Wall Street ride?

n this photo taken Wednesday, May 5, 2010, traders Christopher Morie, left, Vito Perri, center, and William Sachs work on the floor of the New York Stock Exchange. Mixed news on the U.S. labor market and retail sales weren't enough to lift stock prices Thursday, May 6, as worries lingered that Greece's debt woes would spread to other parts of Europe.(AP Photo/Richard Drew)

May 7, 2010 9:02:42 AM PDT
The closing bell today brought with it a collective sigh after one of Wall Street's most turbulent days ever. And now, we're learning more about a big mistake that may be partly to blame for that wild ride. It was a frightening freefall followed by an incredible recovery that was so fast and furious that many are questioning whether a technical glitch or some type of error was responsible.

The Dow was riding nearly 200 points below the opening mark until about 1:48pm when it dropped nearly 1,000 points. For months, investors have feared a correction in what they thought was an overinflated market

But they have also been watching the events unfolding in Greece, where the country has been on the verge of bankruptcy. Protests erupted there Thursday, and stretched into the night after lawmakers approved a bill that will allow them to tap into $140 billion worth of bailout loans.

The bill means salaries and pensions for civil servants will be slashed, and consumer taxes will jump higher. Supporters of the measure say it was necessary to keep their economic problems from spreading across Europe.

While it may be a combination of those things, the big dropoff may have also been because of a human error.

It looked like it was going to be black Thursday, as the selloff on Wall Street brought stocks down and it was a very fast sell off.

At 1:28pm Houston time, the stock market was down 240 points and then the dive started. Minutes later at 1:48pm, the stock market had fallen 995 points, wiping away all of the gains of 2010.

But then almost as fast as the market went down, it started going back up again. At 2:08pm, the market was off just 332 points. The Dow closed Thursday down 347 points, but that's only a 3 percent decrease.

Sources with ABC News say a trade involving Proctor and Gamble may have been entered incorrectly. Instead of selling $16 million in shared, a trader entered a sale of $16 billion. Experts say that might have led to the nosedive. The trade may have originated at Citigroup. Citi says it's investigating what happened, but at this point, they say there's no evidence the error came from anyone at Citi.

Houston-based companies also took a big hit in Thursday's free fall. Here's a look at just a few. Center Point, Halliburton, Sysco and Landry's all down for the day between 3.5 percent to more than 4 percent.

Experts we spoke with sympathize with stressed out investors, but add doing something as the market fell could have been a huge mistake. The bottom line for your 401K? Experts say stay put.

Check your stocks here.


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