*So what happened?

What was building into a bad day turned outrageous, with a 550-point tumble in the space of five or 10 minutes (from 11:42 to 11:52). The Dow plummeted 998 points, at which time the nuttiness of the situation led to a sharp rally that in the end still left the index off 347 points for the day. "It's hard to put logic around it," Art Hogan of Jefferies told KNX. "Nothing really changed between 2:30 and 3 'clock (NY time)." This will take a while to sort out, but CNBC is reporting that a trader with Citigroup erroneously entered a "b" for billion instead of an "m" for million in a trade possibly involving Procter & Gamble. Citi is investigating. That a single click could have caused all this tumult seems more than a little weird, but again it's early. Whatever misstep occurred took place in the midst of an increasingly worried market - like putting a match on a whole mess of kindling.

*From the WSJ:

Shares of Procter & Gamble plunged to $39.37 from around $60. The New York Stock Exchange said each stock has its own circuit breaker level. When these stocks fall below their levels, then they can be traded on any other exchange or platform at any price. When P&G fell below its circuit breaker, a bid came in for the stock at $39.37 from the Nasdaq, the NYSE said. "You don't see a blue-chip stock like this go down 20 points with no news," said Frank Ingarra, co-portfolio manager at Hennessy Funds, a quantitative firm that deals with program traders. "All of the algorithms kicked in from this errant thing."

Remarkably, P&G recovered virtually all its losses, finishing the day down a penny, at $60.74.

WSJ's Evan Newmark says we shouldn't blame the poor guy who messed up:

Why do we pretend that people are in control, when they're really not? The machines are. We'll have to wait for a full autopsy of today's trading day. But it's a safe bet that after the trader's initial error, high-frequency trading computers remorselessly running their algorithms took over. I'd be amazed if "high-frequency trades" don't account for the vast majority of the executions that took place between 2:15 and 3 pm at the NYSE.

Edited post