Dow Jones Industrial Average “Tabulation Trouble”
February 28th, 2007The New York Stock Exchange should be cordoned off and sealed with “CRIME SCENE” tape!
As the black boxes were flushing the DOW30 issues yesterday, the system that calculates the Dow Jones Industrial Average experienced—wait for it—“tabulation trouble.”
The futures were not reflecting the values of the underlying stocks because the average was not updating! The article states, “Some traders noticed a discrepancy between futures contracts tied to the Dow industrials and the index, which directly tracks the stocks.”
NO SHIT!
That thing is such a massive scam that it’s incredible that anyone has any confidence in it at all.
If a casino tried a stunt like this the owners would be frog marched out of the place in handcuffs!
Via: Wall Street Journal:
The sudden, sharp decline by the Dow Jones Industrial Average shortly before 3 p.m. Eastern time today was triggered by a tabulation delay by Dow Jones data systems, which calculates the average. There was a temporary lag in calculation of the 30 large-stock average due to a surge in order flows as the market continued to tumble in afternoon trading, much like a clogged pipe. Just before 3 p.m., Dow Jones Indexes switched over to a backup system to calculate the average, which nearly instantly registered the huge move.
Dramatic Decline
“There was a huge disconnect between the Dow futures and the Dow average†of about 200 points, said Brian Williamson, an equity trader at Boston Company Asset Management. Similarly, the S&P 500 and Nasdaq both fell, but the decline isn’t nearly as dramatic (see chart).
The glitch wasn’t the cause of the decline, but it did cause the drop to register far more quickly than it otherwise would have. Other indexes fell at the same time, but more gradually. Some traders noticed a discrepancy between futures contracts tied to the Dow industrials and the index, which directly tracks the stocks. Usually, the futures contracts closely track the overall average.
Time for the stock players to pay their tithe — they’ll be getting margin calls. heh.
Thank goodness the semi-secret (but not really) Plunge Protection Team was able to step in and bolster the sagging market by over a 100 points before the closing bell. Jeeze.