(Bloomberg) — More than $50 billion of market value was erased from the world’s 10th biggest company. A gauge of market stress got too jammed up to function. The largest technology stocks recorded a correction — in the space of a few seconds.
Such was the drama at the open of trading in the American equity market Monday, when waves of global selling battered stocks with almost unprecedented force. At its worst, about $1.2 trillion of market value had been erased from U.S. shares before prices leveled off and the Dow Jones Industrial Average rebounded almost 1,000 points.
At one point the Standard & Poor’s 500 Index came within 34 points of setting off a marketwide circuit breaker that would’ve shut down trading for 15 minutes to restore order. More than 2 billion shares changed hands in the first 30 minutes, almost one-third of what usually trades in a day.
“We’re in the middle of artillery barrage,” Michael Ball, president and lead portfolio manager of Colorado-based Weatherstone Capital Management, which oversees $675 million, said in an interview. “Watching the first 30 minutes or so, it did start to bring flash back of the flash crash.”
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Fear gripped traders for half an hour as selling deepened after the biggest plunge in four years. General Electric Co. (NYSE:GE), the 10th-largest U.S. company by market value, and JPMorgan Chase & Co. (NYSE:JPM) dropped as much as 21 percent, their worst intraday losses since 1987 and 2009, respectively.
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Stocks in the Dow Jones Industrial Average were down 11 percent on average at their lowest point.
The Nasdaq 100 Index plunged as much as 9.8 percent at the open as Apple Inc. (Nasdaq:AAPL) tumbled as much as 13 percent while Google Inc. and Microsoft Corp. (Nasdaq:MSFT) sank more than 7 percent.
In the options market, the Chicago Board Options Exchange Volatility Index failed to update for about 30 minutes after the open of stock trading at 9:30 a.m., data sent to Bloomberg show. Trading in the contracts from which the VIX is derived was too disjointed to calculate a value, its overseer said.
Then there were momentum stocks, winners in recent months whose success underpins an investing strategy that, through July, had posted some of its best relative returns on record. Investors access the group via the Powershares DWA Momentum Portfolio, an exchange-traded fund that saw assets balloon to more than $2 billion in August.