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Two-day stock massacre: Thursday, Friday losses wipe out all of 2010's gains

UPDATED at 4:11 p.m.

The carnage of the last two days of this week has wiped out all the gains of the year to date.

If Thursday's trading day was apocalyptic, Friday's was merely chaotic and unpredictable. Stocks opened up slightly, following a better-than-expected April jobs report, then fell immediately off the cliff, plunging to a 10:30 a.m. trough.

The spent the rest of mid-day trying to climb back up and the Dow briefly turned positive before the recovery rally ran out of steam and stocks eventually stabilize, albeit in negative territory.

The Dow closed down 1.3 percent at 10,379.60. Bye-bye, 11,000.

The broader S&P 500 closed down 1.5 percent at 1,110.86 and the tech-heavy Nadaq got hit the hardest, closing down 2.2 percent at 2,265.64.

All three major indexes have had their entire 2010 gains wiped out. Today, they stand almost exactly where they stood on January 1. So that's discouraging.

How bad was it? Let us count the ways:

  • It was the Dow's biggest weekly point drop since the freefall of October 2008.

  • It was the Dow's ninth-biggest weekly point drop in history.

  • It was the Dow's worst first-five-days-of-May performance in history. (The stock market has an old adage: "Sell in May then go away." The markets took that to heart.)

  • The Dow has now been down for four straight trading days.

    If there's a bright side to look at, it's that the April unemployment report out this morning suggested that the underlying fundamentals of the economy are improving. The economy added nearly 100,000 more jobs that expected last month. And perhaps a week or two from today, we can chalk yesterday's Wall Street plunge up to a computer mistake and today's to a let's-bail-out-and-wait-for-Monday reset.

    There may be one other bright-side thing to look at: During Thursday's lighting-fast 900-point drop, declines in 3M and Proctor and Gamble stock was responsible for 400 points of the plunge alone, for reasons that are still under investigation. So the terror of Thursday's big dive was not as widespread as first feared. But that's the best I got.

    Stocks stabilize in negative territory

    2:10 p.m.: For the first time today, stocks have showed some stability. That's the good news. The bad news is that they've stabilized in negative territory.

    With a little less than two hours to go on the trading day, the Dow is down 1 percent.

    The S&P 500 is down about 1.1 percent and the tech-heavy Nasdaq is down 1.8 percent.

    Stocks down but trending upward

    12:45 p.m.: I want you to take a look at what the Dow is doing today. Click here.

    If there's any encouraging way to look at this chart -- at least as of 12:45 p.m. -- draw a straight line from where the Dow troughed at 10:30 a.m. to where it is now. That line points sharply upward and that means that since the trough -- even with a lot of volatility in-between -- stocks have been moving positive.

    Here's a look at the S&P 500 chart. And here's the Nasdaq.

    We'll see where it goes between now and the closing bell. Hang on.

    Roller coaster ride

    11:24 a.m.: This officially has become a roller-coaster day on Wall Street.

    After looking like the Street has settled into a sell-off day, stocks have erased many of their losses and the Dow briefly peeked into positive territory before going back underwater.

    With nearly two hours gone on the trading day, the Dow is down four-tenths of 1 percent, well off its bottom of the day (so far).

    The broader S&P 500 is down about four-tenths of 1 percent and back on the rise. The tech-heavy Nasdaq is still lagging on the day, however, and is down more than 1 percent.

    The volatility index (VIX), often known as the "fear index," which is a measure of how traders think about the future, has hit a 52-week high. The VIX reports the implied volatility of S&P 500 index options.

    And the price of crude has dropped below $75 per barrel.

    Stocks plunge in another sell-off

    11:07 a.m.: The early optimism on Wall Street has given way to another sell-off, as traders appear to have thrown in the towel on the week.

    Ninety minutes into the trading day, the Dow is down 1.2 percent.

    The broader S&P 500 is down 1.5 percent and the tech-heavy Nasdaq is down 1.9 percent.

    In even worse news, all three major indexes have now given back all of the gains they have made on the year. Which means your stock portfolio and 401(k) is right back to where it was on January 1.

    The pain is not limited to the U.S. The European markets are in a broad sell-off, too. Everyone is getting hammered by the fear of European debt contagion, which I likened to the black death earlier this week, but Europe's getting it especially bad.

    The U.K.'s FTSE is down 3.6 percent, the German DAX is down 3.6 percent and the French CAC 40 is down eight-tenths of 1 percent.

    You're likely to see more blood in the streets when the Asian markets open.

    Stocks see-saw at opening

    10:45 a.m.: Stocks opened down slightly this morning, made some gains, and then started falling within an hour, as today's better-than-expected April jobs report did little to boost a market still shaky from yesterday's plunge.

    As of 10:44 a.m., the Dow is down 1.5 percent.

    The broader S&P 500 and tech-heavy Nasdaq both opened in the red, followed the Dow's lead and turned positive, then dropped back down.

    This will be a touchy and widely watched day for stocks. Traders and investors will be watching to try to figure out whether yesterday's massive and unprecedented lightning-fast plunge was a combination of bad computer-generated events or a vote on confidence in the markets.

    Follow me on Twitter at @theticker.

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  • By Frank Ahrens  |  May 7, 2010; 4:11 PM ET
    Categories:  The Ticker , Wall Street  | Tags: Business, Day Trading, Dow, Dow Jones Industrial Average, Investing, NASDAQ, NYSE, S&P 500  
    Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Goldman shareholder ends meeting with a thank-you to Blankfein
    Next: Truer unemployment rate rises to 17.1%

    Comments


    The Dow is already down 1.5% today and it is only 11 am.

    Nice going Barry you incompetent boob. Obama is a bigger tax and spend fiasco than what the Greeks and the Spaniards are facing.

    Posted by: screwjob11 | May 7, 2010 11:06 AM | Report abuse

    Yeah, can you believe that Obama? Only a year in office and he's already destroyed the entire European economy...

    Posted by: jerkhoff | May 7, 2010 11:31 AM | Report abuse

    There was NOTHING accidental about the market screw up yesterday. P&G had been noted the previous day as vulnerable to the Euro market upheaval. Somebody on the street preemptively caused a glitch to shore up their positions against potential losses. DOJ needs to look at who made money yesterday. Wall Street continues to rob the individual investor blind. Soon they will completely lose the confidence of the individual investors.

    Posted by: dipazzo | May 7, 2010 11:57 AM | Report abuse

    Yesterday revealed how far the stock market has gotten away from its original purpose. It is now all gambling. Stocks shoot up and down because they are traded by gamblers, not people trying to capitalize businesses and then prosper as the businesses prosper.

    What a sad state of affairs. This also offers more proof that we need to reign in Wall Street.

    Posted by: tinyjab40 | May 7, 2010 12:23 PM | Report abuse

    Operation Fatal Attraction went well yesterday and now it's all keeping it wet. Times Square was a dry run to test response times and plan for future attacks. The enemy keeps coming at us. Do your own analysis and do it right. Wrong gets deadly and there will be losses. Just so the right people are losing all is well that ends well. Have a safe weekend.

    Posted by: tossnokia | May 7, 2010 4:25 PM | Report abuse

    Operation Fatal Attraction went well yesterday and now it's all keeping it wet. Times Square was a dry run to test response times and plan for future attacks. The enemy keeps coming at us. Do your own analysis and do it right. Wrong gets deadly and there will be losses. Just so the right people are losing all is well that ends well. Have a safe weekend.

    Posted by: tossnokia | May 7, 2010 4:26 PM | Report abuse

    Yesterday revealed how far the stock market has gotten away from its original purpose. It is now all gambling. Stocks shoot up and down because they are traded by gamblers, not people trying to capitalize businesses and then prosper as the businesses prosper.

    What a sad state of affairs. This also offers more proof that we need to reign in Wall Street.

    Posted by: tinyjab40 | May 7, 2010 12:23 PM

    --------------------------------

    Amen!

    Posted by: js_edit | May 7, 2010 5:18 PM | Report abuse

    Get ready for the ride . . .

    This is what tax and spend does to Greece and Europe.

    Need to get off the socialist "Hindenburg"

    Posted by: reddog62 | May 7, 2010 5:22 PM | Report abuse

    with Obama and the democrats and their model of regulation, there is no way
    the market could spike or fall over
    900 points in 30 seconds. It just couldn't
    happen. The news must be wrong.
    do not worry about the lack of stories
    about how much money Goldman Sacs is
    raking in and how much they are slipping
    to the democrats in power. As in obama
    and his largest BP donations. If you hear
    that story, go to whitehouse.org, Robert Gibbs will shout it down.
    washington is a FREAK SHOW!
    you get elected and within a year
    you are a multi-millionaire,
    and the press gets it's share
    and nobody is the brighter.
    the only block in america that can
    stem the tide, are the white working class,
    hence, the attacks on the Tea Party's.
    the minorities and special interest
    groups are bought and paid for.
    the big money is rubbing their bellys.
    that leaves the middle class,
    who loses hundreds of billions when
    the market 'unexplicably drops'.
    working class with their retirement in
    401K's and IRA's
    where does this 'value' go.
    corruption has found it's best, biggest,
    exhortion scam ever.
    medicaid wasn't enough,
    the Stock Market is a easy little glitch
    that can be worth hundreds of billions,
    and the press just pleads ignorance.
    the politicians plead ignorance,
    and line thier pockets.
    the democrats are making the republicans
    look like boy scouts.

    Posted by: simonsays1 | May 7, 2010 5:25 PM | Report abuse

    Posted by: tinyjab40

    What a sad state of affairs. This also offers more proof that we need to reign in Wall Street.
    ===========

    Hey Tiny . . . how about reigning in Congress?

    They want to turn our country into a big "Greece" spot by spending us into bankruptcy!

    Posted by: reddog62 | May 7, 2010 5:26 PM | Report abuse

    Dooms Day is really what their looking at but in complete denial of the economy ready for a complete crash.

    Posted by: JWTX | May 7, 2010 5:28 PM | Report abuse

    Dooms Day is really what their looking at but in complete denial of the economy ready for a complete crash.

    Posted by: JWTX | May 7, 2010 5:29 PM | Report abuse

    The spent the rest of mid-day trying to climb back up and the Dow briefly turned positive before the recovery rally ran out of steam and stocks eventually stabilize, albeit in negative territory.

    THEY... STABILIZED
    remember, it was a typo that caused the crash. Only one G-I was shot in WWII for cowardice; the others because of typos.

    Posted by: thomp_rich | May 7, 2010 5:32 PM | Report abuse

    If you truly want to know what is going on; Then you will have to accept these things as the TRUTH. Once you understand the following things; All things will be understood. So I tell you Obama is the Anti-Christ, Devil on Earth, or what ever else you want to call this Demonic Figure. His words describe him, He is a False Hope, If you listen to him you will love him. He carries a Bow without an Arrow. He will conquer all through his speech, his false hoods will capture all who sit and listen to him.

    Posted by: makom | May 7, 2010 5:52 PM | Report abuse

    If you truly want to know what is going on; Then you will have to accept these things as the TRUTH. Once you understand the following things; All things will be understood. So I tell you Obama is the Anti-Christ, Devil on Earth, or what ever else you want to call this Demonic Figure. His words describe him, He is a False Hope, If you listen to him you will love him. He carries a Bow without an Arrow. He will conquer all through his speech, his false hoods will capture all who sit and listen to him.

    Posted by: makom | May 7, 2010 5:54 PM | Report abuse

    are we sure soros had nothing to do with those electronic trading programs...
    are any of those trades, his...

    Posted by: DwightCollins | May 7, 2010 5:55 PM | Report abuse

    Thre steady increase this year has been out of proportion to the performance of the economy. Just as well it didn't turn into unfettered optimism as another bubbling brew of speculative irrationality.

    Posted by: Wildthing1 | May 7, 2010 6:18 PM | Report abuse

    Thre steady increase this year has been out of proportion to the performance of the economy. Just as well it didn't turn into unfettered optimism as another bubbling brew of speculative irrationality.

    Posted by: Wildthing1 | May 7, 2010 6:18 PM | Report abuse

    30 years of Reaganomics, and republican policies have perverted our economy.In the USA 10% of the people have over 70 % of the wealth !! The USA is a plutocracy.The "we the people" crap is just propaganda !!!!!

    Posted by: hyroller56 | May 7, 2010 6:27 PM | Report abuse

    The supposed "gains" made in the Wall Street casino were all lighter than air anyway. The U.S. needs to make **productive** investments. Instead, we piss all our money away listening to idiots and criminals of the Greenspan/Bernanke/Summers/Geithner mindset.

    The finance oligarchy needs to be **broken**, not subsidized. And a whole lot of slicksters need to be looking at prosecution. But that will never happen, in modern banana republic America.

    Posted by: SGlover910 | May 7, 2010 6:56 PM | Report abuse

    The Dow is already down 1.5% today and it is only 11 am.

    Nice going Barry you incompetent boob. Obama is a bigger tax and spend fiasco than what the Greeks and the Spaniards are facing.

    Posted by: screwjob11
    ===============================
    DUDE this is your DOING..
    YOU voted for BUSH TWICE..

    That is insane..

    ISA

    Posted by: Issa1 | May 7, 2010 7:06 PM | Report abuse

    The main cause f this mini panic was one idiot typing BILLION insteadn of MILLION. To put that into perspective -- if 1 million equals an inch, a billion equals 97 feet. And because all the major brokerage firms "microtrade" with computers, one mistake sens the entire system into a tailspin. Watching the Wall Street people over th last two days, on top of the last few years, convinces me that all those so called geniuses who are making a mint off of our money are really just a bunch of morons in fancy suits.

    Posted by: John1263 | May 7, 2010 7:25 PM | Report abuse

    If this two day drop is President Obama's fault, then the $6 trillion worth of wealth created in '09, according to Larry Kudlow's report, speaks positively of the president, doesn't it! But you don't and didn't see any of that money trickling down did you? That must be his fault too, huh?

    AND
    if President Obama had come out the gate and put his foot down on Bullcrap Petroleum, you would have said he was tacking over the oil industry.

    Meanwhile, all through LiL' Bushes reign of terror on the working class, he and his coharts didn't pay for a damnnnnn thing!
    And all of you repubs didn't say a word.

    There is truth to the saying, "You can pay me now, or really pay me later"!

    Posted by: victorlove1 | May 7, 2010 7:25 PM | Report abuse

    The main cause f this mini panic was one idiot typing BILLION insteadn of MILLION. To put that into perspective -- if 1 million equals an inch, a billion equals 97 feet. And because all the major brokerage firms "microtrade" with computers, one mistake sens the entire system into a tailspin. Watching the Wall Street people over th last two days, on top of the last few years, convinces me that all those so called geniuses who are making a mint off of our money are really just a bunch of morons in fancy suits.

    Posted by: John1263 | May 7, 2010 7:25 PM | Report abuse


    ...and my sensors indicate that there is nothing to worry about the glitch in yesterday's space/time/cash continuum at the Earth Americas New York Stock Exchange was merely a janitor flipping off the wrong light switch in a broom closet...

    ...bringing down the computer that posts the arbitrary mathematical predictive calculations that formulate the real time reports and ticker tape readouts...

    ...but not to worry as every broom closet has now been fitted with fail-safe controls...


    Posted by: moon-base-alpha | May 7, 2010 7:27 PM | Report abuse

    Yeah, can you believe that Obama? Only a year in office and he's already destroyed the entire European economy...

    Posted by: jerkhoff |
    =================================

    Yeah and his Party has been running the economy since January 2007.... how do you like the job that Nancy boob and Harry boob have done for the last three plus years running the economy....?

    Yeah........it's time for REAL CHANGE alright

    Tuesday night November 2nd, 2010......a night that will live in infamy as the American people stand up and step forward..

    Posted by: allenridge | May 7, 2010 7:30 PM | Report abuse

    Anyone wonder who made money? So slick....

    Posted by: waxtraxs | May 7, 2010 7:44 PM | Report abuse

    allenridge

    22 out of every 100 declare themselves repubs,those numbers will have to flip before your racist crowd can take over again,
    good luck with that!

    Posted by: victorlove1 | May 7, 2010 7:46 PM | Report abuse

    Frank: I don't know why you're acting as though the fall in the Dow means anything - the gamblers are sitting around the table, and one of them dropped a card face up. The others just bet quick.

    With an official 9.9% unemployment, it's hard for me to believe the Dow reflects an improvement in the American economy.

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    Posted by: wwrytruertirytuey | May 7, 2010 8:13 PM | Report abuse

    Hmm...A Wall Street expert was on CNBC this afternoon saying that another 1500 Dow points could be shed in the days ahead.
    Why? Because large investors will be shorting certain stocks, trying to force the stock prices down, for their profit at other shareholders' expense.
    This conduct is exactly what occurred leading up to the big market crash 14 months ago.
    Lessons learned? Not! Hmm...

    Posted by: mtpeaks | May 7, 2010 8:20 PM | Report abuse

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    Posted by: itkonlyyou48 | May 7, 2010 9:00 PM | Report abuse

    What is this? More profiteering by companies like Goldman Sachs? The stock market should be closed for trading until better regulation is in place before these thieves get all our money!

    Posted by: albalma | May 7, 2010 9:07 PM | Report abuse

    Not to worry, obama will shape up those traders..........

    Dow loses 772 points in 4 days ?

    Should not have been a gain in the first place......

    Posted by: UpAndOver | May 7, 2010 9:13 PM | Report abuse

    ...ha ha ha...

    ...Goldman Sachs, and sparky the wunderdog...

    ...ha ha ha...


    Posted by: moon-base-alpha | May 7, 2010 9:43 PM | Report abuse

    are we sure soros had nothing to do with those electronic trading programs...
    are any of those trades, his...

    Posted by: DwightCollins

    ============

    No, it was Greenpeace ... ooops sorry that was the oil rig. This is Friday, it was either Soros or moveon.org

    You can pick either one from whatever you hear in your aluminum foil hat. You might want to go off line with makom. If you coordinate a little better you could have a consistent message ... The anti-Christ George Soros. I'd go with that.

    I've never had a liking for Hungarians. They put their last name first. That's like the Chinese and you know we can't trust the Chinese. Plus he changed his name. His birth name was Schwartz Gyorgy which in Hungarian is Soros Gyorgy [remember the part about Hungarians having their last name first] which he changed to George Soros.

    Anyway, you have a good point if I bothered to remember what it was.

    Posted by: James10 | May 7, 2010 10:14 PM | Report abuse

    To DwightCollins:

    Ya know it just struck me ... Schwartz. That's a Jewish name isn't it? You problem with George Soros is his father was an orthodox Jew. You're anti-Semitic aren't you? I'm anti-Hungarian but that's because of that Austro-Hungarian empire thing. But you're anti-Semitic.

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    Posted by: itkonlyyou48 | May 7, 2010 11:08 PM | Report abuse

    I'm in a dangerous position and that's where I'm happy. It could get more dangerous or even fatal. That's the attraction.

    Posted by: tossnokia | May 10, 2010 9:57 AM | Report abuse

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