Investors worldwide are dusting off their worry beads as markets tumble into correction mode.Asian markets are down from 2-4% following sharp drops on Wall Street.Indeed,the Dow Jones Industrial Average experienced a plunge of more than 900 points-it's worst one-day plummet ever-before rallying back to a more manageable level.Much of the record fall is being attributed to technically faulty trades that have subsequently been canceled by the exchange authorities.
Lights are burning at the Securities and Exchange Commission and Commodity Futures Trading Commission as they work with stock exchanges to protect investors from further chaos.Although much of the correction is a legitimate reaction to the Greek debt crisis and fear of contagion,as well as a European Central Bank that is biding its time on further measures to deal with the matter,it appears to have been exacerbated by electronic or human error or both.A congressional subcommittee will examine the event on Tuesday.
The correction comes at a time when small investors were beginning to feel encouraged about their prospects again.It may be a setback with an indefinite horizon.Many analysts believe we could see a further loss of 5-15% in the short term.On the other hand,bonds and gold surged in response to the free fall.
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