Earthquake on Wall Street- 900 PT Drop at one point

Commentary: Market's wild ride rattles already fragile confidence

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900-point earthquake rattles Wall Street
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By MarketWatch

SAN FRANCISCO (MarketWatch) -- A couple of hours after the close and there's still no official explanation for the stock market's hair-raising plunge Thursday.

At one point the Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (INDU 10,520, -347.87, -3.20%) was down 992 points. By the time it was all over, a mere 348-point decline for the day didn't look so bad. See Nightmare on Wall Street.

But it was. It was terrible. Not because of the stock losses, which hurt, but because it ripped away another layer of confidence in a system people count on to protect and create wealth.

There were plenty of reasons at the session's outset to believe the bears would take control. Greece's economic meltdown, mounting pressure on the euro and a very uncertain outcome in Britian's parliamentary elections all pointed to a rough day.

So no one was surprised when stocks headed south. But then something happened, something exchange officials and regulators are scrambling to understand, that made investors freeze. Within minutes, the Dow plunged 300... 600 ... 900 points. Then it came roaring back like some kind of tsunami.

Anyone watching was dumbstruck. When the market resumed breathing, suspicions immediately turned to some diabolical technical glitch -- perhaps a trade gone terribly awry that triggered the fastest sell-off ever seen.

The first time traders witnessed anything like this was in September 1987, when computerized buy-sell programs unleashed their awesome power. No one saw it coming. Who knew there were so many new-fangled computers out there firing on the same price points and executing trades at super-human speed?

Safeguards were soon put in place to protect the market from that kind of automated panic. Investors were assured it couldn't happen again. And most believed it, or wanted to, just as millions of Europeans trusted the economic checks and balances defending their common currency and millions of Americans trusted financial institutions to regulate themselves.

Let's face it. Events like the one that rocked the market today aren't the end of the world, but they severely shake investor confidence, which is at the very core of capitalism. It's especially hard on those staring down the maw of retirement. How many more hammerings can their nest eggs withstand?

Perhaps more to the point: How many cataclysmic market events can their hearts withstand? A few more glitches like this and retirement for many Boomers could be the last of their worries.

-- Jim Jelter