Computer glitch made market drop seem worse

The problem began at 1:50 p.m Tuesday amid heavy selling and caused a 70-minute time lag in calculating the value of the DJIA, according to a statement from Dow Jones Indexes. A system that feeds market data to the computer calculating the DJIA suddenly began experiencing delays. “While the DJIA was still being calculated and disseminated, the calculator was not receiving the underlying component prices of the DJIA on a timely basis.”

When the problem was identified, Dow Jones Indexes switched over to a back-up computer and the result was a sudden 200-point plunge in the DJIA as the system caught up with the latest market data. “This switch-over caused prices that were received during the latency period to be processed all at once, bringing the index immediately in line with its underlying component stocks.

“Dow Jones Indexes is continuing to investigate the latency issue to correct the root cause of the problem.”