Massive slump: Data on screens inside the New York Stock Exchange show just how dramatic yesterday's fall in the Dow Jones was
Shock: A trader is surprised by the massive drop that followed the alleged erroneous sale
Believed to be a trader for Citigroup, he is said to have caused the panic in a trade of Proctor & Gamble stocks that saw the price of shares in the company plummet from $62 to $39.37, before recovering to close at $60.75.
That caused the Dow Jones, New York's answer to the FTSE to fall by a shocking nine per cent, but it regained most of that loss within 20 minutes.
Citigroup today said it was investigating the the reports, but said it had no evidence that an erroneous trade had been made.
The U.S. financial watchdog said it is working closely with the Commodities Futures Trading Commission to review yesterday's unusual trading, which at its deepest point wiped $1trillion off equity values.
The Securities and Exchange Commission Chairman (SEC) Mary Schapiro cancelled an appearance at an industry trade group breakfast this morning to focus on the trading glitch.
'She felt it was important to remain at the office and follow up on unusual trading acitivity that took place briefly yesterday afternoon,' said Andrew Donohue, the market watchdog's director of the Division of Investment Management.
Computer selling in the US intensified yesterday's selling while panicked investors watched violent protests in the streets of Athens on TV.
The White House said President Obama was closely monitoring the situation and his aides were in frequent touch with their counterparts in Europe.
Fears are running high in the financial markets that the Greek government will not be able to implement austerity measures that would enable it to contain its debt problems.
And, in turn, that the country's problems will hurt other economies in Europe - including Britain - and even the US.
The pound dropped from $1.486 before the crucial 10pm forecast to $1.474 - suggesting some investors were worrying about the impact of no clear election decision and its impact on tackling the UK's massive deficit.
Sterling also fell against the euro, down from 1.174 euros before the poll, to 1.168.
The pound initially ticked up marginally against the currencies as some investors took heart from a strong Conservative showing, but they dropped back down soon afterwards.
Michael Hewson, currency analyst at CMC Markets, said: 'We are basically seeing people say: a hung parliament - don't like that, sell sterling. There is a lot of uncertainty about the horsetrading between the parties that will follow one party not having a clear majority.'
The Wall Street drama came after Greece's parliament voted to accept austerity measures worth £25million, a day after three people were killed in riots in Athens.
On Wednesday, Greek police fired tear gas to repel stone-throwing protesters in a new round of violent street clashes.
Britain’s £890billion debt burden has put it squarely in the firing line, with investors calling for decisive action to rein in the deficit once a new government has taken power.
Analysis from the European Commission this week showed that Britain’s budget deficit will be the most burdensome in the EU this year, at 12 per cent of national income.
That is even higher than Greece, where the government is struggling to win popular support for swingeing austerity measures.
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