Tuesday, June 8, 2010

DJIA Slides Under 'Flash Crash' Low

Blue Chips Fall 115.48 Points to 7-Month Low as Buyers Stay Away; a Sudden Pulse Pushes Up Gold

Wall Street Journal -

Stocks fell on Monday in a late-day selloff that took the Dow Jones Industrial Average below its lows of the May 6 "flash crash."

The Dow ended down 115.48 points, or 1.2%, at a seven-month low of 9816.49 and below 9869.62, its low-point of the May 6 slide. That day, buyers rushed into the market at that level, helping pare a 1,000-point drop to a decline of 347.80 points.

But on Monday, no such buying appeared. The Nasdaq Composite fell 2%. The Standard & Poor's 500-stock index slid 1.4%.

"Global tensions are at a pinnacle," said Mike Daly, gold specialist at PFGBest in Chicago. That has prompted investors to move money into "tangible, safer assets."'

As part of that move, gold soared, ending with its biggest one-day gain in almost four months. Gold also began the day quietly. But at around 10 a.m., a sudden wave of buying drove the metal up by 2% within an hour, pushing it toward record Comex highs reached in mid-May.

Gold has been used by many investors as a refuge for everything from the slumping euro to inflation fears. On Monday, traders speculated that an investor trying to hedge against losses in euros may have placed a big bet that shot the metal higher.

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