FNArena Alert: Dow Might Be Wrong

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By Greg Peel

Associated Press reported shortly after the close of the New York Stock Exchange last night that closing prices may be spurious.

At 2pm New York time, two hours before the close, it was discovered that the computers were not correctly calculating trades due to record volume. The NYSE switched to a back-up computer.

The result was a rapid catch-up in traded prices that sent the Dow to its trading lows (down 546) in seconds.

"The market’s extraordinary trading volume caused a delay in the Dow Jones data systems," said Dow Jones spokeswoman Sybille Reitz. "We decided to switch over to the backup system, and the result was a rapid catch-up in the published value of the Dow Jones industrial average."

Spokesmen for both the NYSE Group Inc and Nasdaq Stock Market Inc could not confirm whether or not all closing prices were valid.

The question is whether the result could be an understatement or overstatement of the index. FNArena was following the Dow from 6.30am Sydney time when the index was down just over 200 points. Within the space of a cup of tea, the Dow had hit its lows and rebounded from down over 500 to be down around 350. It closed with a slip to down 400.

Tonight’s market will be very interesting.

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