Dow Down 416 points. Why?

On Tuesdaym February 27, the Dow Jones Industrial Average went down 416 points, or 3.29 percent, the biggest drop since Septermber 11, 2001. Invesors lost an estimated $613 billion on that day. The Dow actually feel to as low as 500 points but recovered to 416. Analysis speclate that the drop was a reaction to the huge market correction in the Chinese stock market. However, many believe that the drop was due to a computer glitch. A glitch prevented kept some trades from being immediately reflected in the index. Dow Jones & Co. blamed the problem on the record volume at the NYSE, and switched to a backup computer.

Despite its immediate servrity, the drop was not significant enough to make the top 20 list of drops since 1950. This drop is nothing in comparison to the stock market crash of 1987. On Black Monday, the Dow Jones lost 22.6% of its value, and in 2002, the market lost 4% of its value on two occations.

I think this is a good opertunity to buy, however that is still a risky move since no one knows if stock values will continue to decrease and when they will stabilize. As I stated earlier, I plan on waiting out the storm until stock values begin to climb again. Since many companies have begin to climb again, I have decided to invest in a few that will likely continue to increase in the long term.