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Machines Had Fingerprints All Over a Dow Rout for the Ages

  • Selling pushed the Dow down about 900 points in 10 minutes
  • Rout was the worst for U.S. equities since August 2011
Bloomberg business news
Scott Wren, Wells Fargo Investment Institute senior equity strategist, discusses the selloff in U.S. stocks.(Source: Bloomberg)
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Risk parity funds. Volatility-targeting programs. Statistical arbitrage. Sometimes the U.S. stock market seems like a giant science project, one that can quickly turn hazardous for its human inhabitants.

You didn’t need an engineering degree to tell something was amiss Monday. While it’s impossible to say for sure what was at work when the Dow Jones Industrial Average fell as much as 1,597 points, the worst part of the downdraft felt to many like the machines run amok. For 15 harrowing minutes just after 3 p.m. in New York a deluge of sell orders came so fast that it seemed like nothing breathing could’ve been responsible.