Cindy Perman, JeeYeon Park
May 6, 2010
The Dow plunged Thursday amid buzz in the market that European banks have halted lending.
One trader, on the condition of anonymity, said he heard fixed income desks in Europe shut down early because there was no liquidity — basically European banks are halting lending right now.
“This is similar to what took place pre-Lehman Brothers,” the trader said.
The Dow was down more than 900 points at one point, or more than 8 percent, before pulling back to the 600-700 point range.
Under current, New York Stock Exchange rules, if the market falls ten percent or more between 2:30 and 3:00 pm ET, trading is halted for 30 minutes.