Michael Petronella, the president of Dow Jones Indexes, said there was a problem with the system that feeds market data into the calculation system. While the [Dow Jones Industrial Average] was still being calculated and disseminated, the calculator was not receiving the underlying prices for the 30 stocks in the Dow on a timely basis.The Dow dropped a whopping 416 points altogether, which CNN Money says is the industrial average's seven-biggest point decline ever. Miller Tabak & Co. told CNN, "To see the market drop hundreds of points out of nowhere was alarming, to hear that it was a technical glitch really pissed people off."
Once the slow data feed problem was recognized, Dow Jones Indexes switched to a back-up system, causing prices to be adjusted all at once, bringing the index immediately in line with its underlying component stocks. That led to the big 200-point drop.