May 6 (Bloomberg) -- Nasdaq OMX Group Inc. said it will cancel stock trades on all exchanges that were more than 60 percent above or below prices at 2:40 p.m. New York time, just as U.S. equities plummeted.
The Dow Jones Industrial Average plunged almost 1,000 points before trimming its drop and ended down 347.80 points, or 3.2 percent, at 10,520.32. About $700 billion of U.S. stock-market value was wiped out in less than 10 minutes, according to data compiled by Bloomberg.
Nasdaq, which investigated trades between 2:40 p.m. and 3 p.m., said it will provide a list of stocks affected and the prices at which the trades will be canceled. The decision cannot be appealed. NYSE Euronext spokesman Rich Adamonis said earlier today “there were a number of erroneous trades.” Citigroup Inc. may have been the firm that made a potential erroneous trade, CNBC reported, citing “multiple sources.” The New York-based bank said it found “no evidence” of erroneous trades.
“Somebody hits the wrong button and everybody heads through the same door at the same time,” said David Goerz, who oversees $17 billion as chief investment officer at Highmark Capital Management in San Francisco. “It’s unfortunate. It clearly was a factor. When you have a lot of skepticism and nervousness in the marketplace, that just exacerbates the problem.”