What's the Difference Between Wall Street and Las Vegas? One's in a Desert

Unexplained Dive in share Prices Leaves Investors Shaken

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    NEWSLETTERS

    TK
    ASSOCIATED PRESS
    Trader Steven Rickard reacts in the S&P 500 futures pit at the CME Group in Chicago near the close of trading, Thursday, May 6, 2010. The stock market has had one its most turbulent days ever with the Dow Jones industrials plunging nearly 1,000 points in half an hour before recovering two-thirds of its losses.

    After a week when investors might have been forgiven for thinking they'd have a better shot at a blackjack table, the Dow average settled off only 771 points since Monday.

    That's despite a five minute period Thursday afternoon when the market freefalled so abruptly, plunging almost 1000 points, that veteran traders actually didn't know at what price some stocks were selling.

    "Unfortunately, they're making this place look a lot more like Las Vegas because of all the volatility," said 41-year trader Ted Weisberg, who is president of Seaport Securities.

    Who "they" is, remains unclear. Greece's economic meltdown sparked trouble in world markets. And reports of a clerical error that substituted a "billion" for "million" on a sell order Thursday are being discounted by experienced traders.

    "The regulatory authorities are evaluating this closely with a concern for protecting investors and preventing it from happening again," said President Obama.

    Analysts said though that the review could take weeks to unravel Thursday's trades to determine why the Dow bungee jumped down 996 points and then almost immediately back up 600.

    "It's not the type of market anymore where you can buy anything, put it away in your 401(k) and retire on it in 15 years. You're going to have to manage what you're doing," said David Silver of Wall Street Strategies.

    Friday wasn't much less unnerving for investors than the previous session. With swings of more than 340 points up and down in the Dow all day, a chart of market activity resembled a sketch of the Adirondack Mountains.

    "Right now I just think my best bet is to keep it in the bank," said 23 year-old Josh Macri in Chelsea. "When it's in the bank I can't lose it." Macri grew up through a series of volatile economic years.  Like many younger investors, he's never known a stable stock market.

    "What happened this week will happen again and again and again," said broker Weisberg. He pointed to the majority of trades now being ordered by computers programmed to respond to market moves as a culprit.

     "They ignore the fundamentals of companies," Wesiberg added, noting that the programs sell when the market's going down, based on mathematical formulas. "It perpetuates the trouble when there's trouble."