Tuesday’s ‘flash crash’ precipitated by a fake tweet attributed to a major news organization is old news by now. No long term investors got hurt in the debacle and by the end of the week it was business as usual in the nation’s exchanges. That doesn’t mean it won’t happen again and again.
In just four minutes $136 billion was erased from the S&P 500 Index, the main benchmark average of the stock market. The Dow lost 145 points at the same time. Both averages regained those losses over the next two minutes causing some traders to check whether the elevator ride was real or a computer glitch. It was neither.