Local investors do double-take on Thursday free fall




Posted on May 6, 2010 at 6:57 PM

SEATTLE – Western Washington investors did a double-take Thursday afternoon as Wall Street went into a free fall.

"There was a big panic. A real big panic," said Diane Daggatt, who was at the trading desk at Macadam Wright Ragen.

Stock prices were bumping down gently all morning, but just before noon, they fell off a cliff, falling 998 points before rebounding to close down 347. It was believed to have been caused by a simple typographical error.

Daggatt has seen drops before, but not like this.

"We watched it go down 300, then it was down 400. It kept going down another 100 points and, before you knew it, it was almost down a thousand," said Daggatt. "It did not feel good, but we couldn't believe it and we didn't think that what was going on overseas could cause such a dramatic selloff over here."

Director of Research Paul Latta wasn't sure he was seeing what he was seeing.

"I might need glasses, that was the first thing that I thought," said Latta.

His best guess for the drop was a combination of factors. Not just the unrest and financial turmoil in Greece, but also a strong market due for a selloff and a simple data entry error somewhere along the line.

"When somebody types in a B instead of an M, and suddenly you've got a billion instead of a million and suddenly people think that there's something that they don't know that everybody else knows," said Latta.

"Once that word started getting out, the stocks started to recover," said Daggatt

Now, it’s time to watch the Asian markets overnight and wait for Friday.

"We've had more violatile days than this, but it's been awhile since we had one, so it's a bit of a wake-up call that his can happen," said Latta.