Is The Dow Jones Index Playing Second String games as Wall Street Burns?
Late Tuesday afternoon, Dow Jones Indexes made a seemingly minor confession about a technical glitch that took place earlier that day. Specifically, in the middle of Tuesday’s market decline – beginning at 1:50 pm precisely – Dow Jones Indexes began incorrectly reporting the Dow Jones Industrial Average (Dow). In other words, instead of displaying say 12,200 – the actual trading level of the 30-Dow components – the Dow was showing 12,350. Ever vigilant, they eventually identified the problem and “switched over to a back-up system” at 3:00PM. Now there is no question that computers sometimes do err: instances of market miscalculation and/or miscommunication have dotted the financial ledger in the past – like between the futures and cash markets during the crash of 1987. However, and although a potentially innocent event, the interesting thing about Tuesday’s computer malfunction is that it persisted without being recognized for 70-minutes! The question to ask, naturally enough, is what
