Stock markets were volatile Friday, one day after a massive plunge and bounceback on Wall Street. U.S. President Barack Obama says regulatory authorities are evaluating Thursday's wild swing.
Speaking to reporters in Washington Friday, Mr. Obama billed Thursday's roller coaster ride on Wall Street as "unusual market activity."
Unusual is an understatement. In a matter of minutes, the Dow Jones industrial average plummeted almost 1,000 points -- its biggest intraday loss since the 1987 market crash. Just as mysteriously, it largely rebounded. Shares of Accenture illustrated this volatility -- dropping from $40 to one cent Thursday afternoon only to bounce back to about its pre-plummet price.
The U.S. president says authorities are trying to unravel just what triggered this massive fluctuation. "The regulatory authorities are evaluating this closely, with a concern for protecting investors and preventing this from happening again. And they will make findings of their review public, along with recommendations for appropriate action," he said.
A number of trades made as the market went amok Thursday were canceled Friday. There are suggestions that a glitch in electronic trading or the New York Stock Exchange's structure or simple human error played a roll in that boomerang activity.
And when a reporter asked if something sinister could have been behind Thursday's sudden plunge, White House Spokesman Robert Gibbs said he would not rule anything out.
Art Cashin, a trader in New York with UBS Financial Services, says Thursday's volatility was eye-opening. "I think it was a sobering experience, and it tells us a couple of things: that unless you're careful, markets can be very thin and that we need a little more work to get everybody on the same page as far as speed bumps and safety are concerned," he said.
Cashin said he fears that one day, someone is going to hit a wrong button and the market will melt down if safety measures are not in place.
Beyond those concerns, there are fears about Greece's financial instability and whether it can be contained -- even as the European Union and the International Monetary Fund move forward with a massive $145 billion rescue package for Athens.
Francis Lun is the general manager of Fulbright Securities Limited in Honk Kong. "Even with the rescue - 110 billion euro [$145 billion] rescue - Greece is simply bankrupt unless its industry, its tourist industry, can recover. It's just that the European Central Bank is avoiding the tough question that it should kick out Greece from the monetary union. It's unattainable," he said.
President Obama says he spoke with German Chancellor Angela Merkel Friday morning about economic and financial developments in Europe. "We agreed on the importance of a strong policy response by the affected countries and a strong financial response from the international community," he said.
Mr. Obama said he told Ms. Merkel that the United States supports such efforts and will continue to cooperate with European authorities and the IMF.
As for the markets, on this last day of trading before the weekend, European and Asian stock markets closed lower, while U.S. stock market indexes got a boost in early morning trading, but declined later in the day.
