Return to Transcripts main page
Rick's List
Protests in Greece Turn Violent; Dow Plummets
Aired May 06, 2010 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICK SANCHEZ, CNN ANCHOR: Thanks so much, Don.
Boy, there is really a lot of -- a lot going on. And the volatility in the market has been frightening to those of us who have been watching it, as you said moments ago. I think we saw it move almost like 400 points in -- almost in an instant.
We have got crews there in New York who are going to be taking us through this story, as well as the reaction that you can expect that we're going to be getting in Washington.
But I want to start off with -- with what may very well have been the catalyst for this, which was the very first pictures that we started getting of what was going on in Greece.
Rog, if you have got those, I want to show this confrontation. And, as you know, we have a correspondent there who has been following this for us as well. Hopefully, we will be able to hook up with her. And she's going to show us how this developed, why it developed, and how it suddenly became so climatic, just as police started moving in on some of these protesters.
Now, we are being told that some of these very same images -- and this is important -- that some of these very same images were being seen by some of the traders on Wall Street, and that there may have been a certain amount of reaction to this.
Let me dip into this for a little -- quick. I just want you to hear the sounds coming out of Athens here. Go ahead and pod that up, if you would, Jeff (ph). These are remarkable pictures. And it happened suddenly.
And as we watched this develop, there was another story that started developing in New York, as, suddenly, we started to watch the Dow just plummet.
And we have been told for quite some time that we are very much linked to this situation that's going on in Greece. And some experts, although not all, have theorized that this would have an effect on our market. And it seems to have done that.
I want to take you right down to the floor now. That's where Alison Kosik is following this story for us to bring us up to date.
Could you take -- Alison, how are you? Can you hear me?
ALISON KOSIK, CNN CORRESPONDENT: Doing well. Hi, Rick.
SANCHEZ: Alison, could you take our viewers through that moment which we all stood up in our chairs in the newsroom and watched as this thing sank like a lead balloon?
KOSIK: Sure.
Here at the NYSE, usually, at this time of day, around 3:00 in the afternoon, it's pretty quiet. I mean, Rick, a lot of the trading is done electronically, less of it done here, right here on the floor of the New York Stock Exchange. It is usually pretty quiet.
I'll tell you what. When this drop was happening, there was a lot of activity on the floor, lots of traders and specialists watching the Big Board, where you watched the Dow and the Nasdaq and the S&P, the numbers of the day, and they were watching it drop. They were just as surprised as everybody else watching -- Rick.
SANCHEZ: What were they? Were they freaked out by the pictures in Greece, thinking that that would obviously had some kind of cataclysmic effect on the economy worldwide?
KOSIK: Well, sure. I mean, that's the worry, is that this is going to spread here to the U.S., that that's been the worry, especially all week. I mean, there's been a lot of volatility in the markets this week. We have seen the markets, especially the Dow, take huge swings all week, so, you know, at the same time these traders and these specialists were really surprised when they saw the market drop as fast and as much as it has done this afternoon.
SANCHEZ: Yes.
Well, and the point being is that this thing was over 11000, and we were all reporting the fact that it was over 11000. Some were saying the market's back, although not everyone was saying that.
And then, all of a sudden -- you need to understand, folks, that number that you see right there, the 10467 number, that number went under 9,000 for just a little bit. So, do the math. You start at 11000. You go all the way under 9000, and in a span of what, Alison? I think it was almost...
KOSIK: It was in a matter of minutes.
SANCHEZ: It was almost like five or 10 minutes.
KOSIK: Yes, in a matter of minutes. Everyone was shocked here. You saw jaws drop, literally. And they said, I don't know what is going on, but they also said, hey, it's Europe. It's all Europe.
SANCHEZ: Europe, all Europe.
Paul La Monica is joining us now as well.
Paul, the other side of the story, the converse of this -- and, by the way, we're staying on some of these pictures and what is going on right now in Greece. As you know, some of the austerity measures that have been called for there are not going over well with many of the citizenry.
They have taken to the streets, and there have been certainly disturbances. I don't know if at this point we want to use the word riots. Being from Miami, I come from a town where that distinction is very, very important. So, we will -- we will be respectful of exactly what the police officers are going to say in that situation.
Paul La Monica is joining us now from our Money team as well in New York.
Paul, my question to you is, do we have any idea -- we know what sent it down. What sent it back up? Because if it was down to 900- and something, now I'm seeing it's what, at 408. This thing came back almost 500 points. Why?
PAUL LA MONICA, EDITOR AT LARGE, CNNMONEY.COM: Yes, it's so hard to say why exactly we had it bounce back as quickly as it did. I mean, it's hard to explain why it fell as sharply as it did.
Yes, you do have those powerful pictures, but, all of a sudden, it just really went quickly downhill. And that does speak, I think, to the fact that a lot of this is maybe kind of computer-generated, not necessarily people stampeding for the exits, if you will.
SANCHEZ: But at that point, we were sitting there kind of holding our breaths. I mean, you can't help but hold your breath when you watch this thing. And we were in the newsroom, and it went down five -- down 500, 600, 700, 800, 900. It looks like it was going to, you know, the 1,000 mark, and it almost seemed at that point like, where does this thing stop?
What was the thinking going on there with our colleagues in the CNN Money pit?
LA MONICA: We were all, you know, stunned as well. Everyone was really gasping at just how dramatic and how fast this was taking place.
And then before we could kind of catch our breath, there you go, the markets were starting to slowly -- or not-so-slowly bounce back. You can't underestimate how important right now the concerns in Europe are.
But I do think that you have to put a lot of today's sell-off in context. The market has surged from the March 2009 lows, and a lot of experts have said that we needed a correction, if you will, a big bounce -- or a big sell-off, excuse me, from the peaks that we were starting to reach, and it's been probably long overdue.
(CROSSTALK)
SANCHEZ: But look what's going on now. This thing is back over at -- back around down 300. Now, look, on any given day, we would have been reporting that the market was down significantly if it's down in the 300 range, but now, you know, we use that word volatility, where things start to go in peaks. And it's kind of scary to see it at 200, 300, then 900, back to 600, now at 300.
But the point is, as anyone is looking at this, they're trying to figure out exactly what it's going to do next, right? And that's probably -- you're an expert on this. I'm not. That's not good.
LA MONICA: No, not at all.
The biggest concern, I think, people have right now is, just as you pointed out, how volatile the market has become as of late. We had had, up until this week, for the most part, a pretty calm market for 2010. yes, you had some big up days, some big down days, but nothing like this.
This, unfortunately, is going to bring back some pretty scary reminders of the fall of 2008, when Lehman Brothers went bankrupt and that sent the entire global market and economy into a severe tailspin. We're not trying to say that that is going to happen because of Europe just yet, but definitely the fears are there.
SANCHEZ: Well, the good news at this point is that we still got -- we still got time left in this hour. Whether or not it will start a new rally that will take this thing in the other direction or not is something I'm sure some people are hoping for. Maybe some people betting the other way are not, but either way, it would be nice to see this thing close out at least at where it started, around 11000.
By the way, back to the pictures out of Greece -- and put those up, Roger, if you possibly could. For those of you just now getting home from work and you're joining us, I mean, this thing became as crazy as just about anything we have seen.
I think one of our correspondents, Diana Magnay, is there. She's been reporting on this. She was the first to break the news about how this thing had gone down, what was developing. And we're still not quite sure what was the trigger for this event that suddenly saw police going after protesters, protesters going after police, rocks and bottles being hurled.
We knew that there would be protests today. There were some protests yesterday. It seemed like, in this one moment, things just turned into a bit of a melee there on the streets of Athens.
And now you hear some of those -- some of those weapons that are being used to try and hold the protesters at bay. Look at the sheer force of police officers there on the scene.
Now, Paul, you're watching this with us.
By the way -- this is just to the control room -- Angie, Roger, Pamela, if you guys would let me know when we're able to get to our correspondent there in Greece, so we can get a -- share with our viewers a sense of how this thing developed.
Paul, back to you.
Why are these images so important? Why did they seem to have this effect on Wall Street?
LA MONICA: I think this really humanizes the crisis that we have all been hearing about.
It's one thing to hear about Greece having a big debt problem and various rating agencies cutting Greece's debt to junk. These are all the kind of jargony things that don't really hit home with an emotional thud, the way that pictures of violent protests do.
And I think that's really waking up a lot of people that this isn't just about numbers, and it's not just about, you know, what Greece's economy means for the rest of Europe even. It really is a very compelling human interest story now, and that's not something that Wall Street is accustomed to dealing with often.
SANCHEZ: I know this is a difficult thing for me to ask you to do, but could you explain to our viewers as best you can why it is that a debt crisis in a country like Greece would affect our market and possibly, subsequently, our economy as well?
LA MONICA: Right. The biggest reason is that -- because Greece is now part of that, you know, so-called Eurozone, the nations in Europe that use the euro currency.
Prior to the euro being around, this probably would have been isolated to Greece and maybe some of the other countries around it, but you wouldn't have had people in Germany, France, other big European nations having to feel that they need to step in and bail Greece out.
And there's also the fact that Greece is not alone. Everyone's been talking in the markets about the so-called PIIGS nations, Portugal, Ireland, Italy, Ireland, Greece, and Spain. And there is that very, very fear -- concern out there that this is going to spread beyond Greece, some of the other countries in Southern Europe and maybe even Ireland and perhaps even the United Kingdom.
You're seeing, you know, very significant concerns about what's happening with the elections in Britain. The pound has also been losing value against the dollar. So, it's really -- the story is that Europe, collectively, is the world's largest economy. So, if it's just worrying about Greece, you probably don't have to be that concerned. But it's not just worrying about Greece. It's worrying about the entire continent.
SANCHEZ: Hey, Paul, stay with me.
In fact, jump in here when -- if you think that you have a question or a comment that needs to be made, because, collectively now, let's work our way through this. For those of you who are just now watching us, there are two stories that are -- well, it's really the confluence of two stories. There's a story in Greece where there have been what appear to be civil disruptions and civil unrest, possibly riots, as opposed -- as a result of what's going on with the Greek debt crisis, and that seemed to have caused a reaction in the market.
At one point, as strange as this may sound, the market shot down like a lead balloon. I don't know if you all saw it. I went down to almost 900-and-something, but it wasn't just that it went down. It's the rate at which it went down. It must have been a remarkable moment to actually be there on the trading floor.
I want to bring in a trader now, Paul. His name is Ted. He was there. And he's joining us now live.
Ted, how are you doing, sir?
TED WEISBERG, PRESIDENT, SEAPORT SECURITIES CORPORATION: It's Ted Weisberg. And I'm with Seaport Securities.
SANCHEZ: I can barely hear you. I don't know if our viewers can hear you. But I can barely hear you. Would you -- would you mind saying that one more time?
WEISBERG: Sure.
SANCHEZ: And, Jeff, our audio guy in the control room, can you adjust me, so that I can hear that?
WEISBERG: It's Ted Weisberg.
SANCHEZ: Yes.
WEISBERG: And I'm with Seaport Securities. And I have been a member of the stock exchange for 41 years.
SANCHEZ: Mr. Weisberg, you're very kind to join us. In your 41 years, have you ever seen anything quite like this?
WEISBERG: Well, I mean, I remember October '87. The Dow was down 22 percent in one day. And the Dow, as a -- at a level, was much lower. That represented 500 points.
There's a lot of technical things going on. Obviously, you talked about Greece. But one of the things that apparently happened, which is a little confusing and hard to understand, but there was one stock in particular, I think Procter & Gamble, that went from a fast market to a slow market in New York, but the other markets around the country did not recognize it, and apparently the stock went down dramatically, 30 or 40 points, which represented in itself 200 -- because it's a Dow stock -- 200 points down in the Dow.
SANCHEZ: Well, so -- and that's a blue chip stock.
WEISBERG: Right. (CROSSTALK)
SANCHEZ: So, is it that -- is it significant enough to cause this kind of reaction, though?
WEISBERG: Well, yes, it is, because it's in the averages. Now, it went down for technical reasons, not for fundamental reasons. And I think you have to understand that. It was -- it's a glitch in the trading system, not here in New York.
But the -- our equity trading markets have changed dramatically over the last four or five years due to -- due to dictates from Washington. And a lot of the -- a lot of the structure that was in place when it came to trading equities in the United States are no longer the same.
(CROSSTALK)
WEISBERG: And one of the byproducts is the risk of dramatic volatility, such as what we have seen today.
SANCHEZ: Well, that's interesting. It's almost like what you're saying is -- are you talking about mechanical triggers that go into effect that cause this type of thing when you're in this situation with a company like Procter & Gamble?
WEISBERG: Well, yes. I mean, and it's not company-specific. It's trading-specific. So, you know, you don't want to -- you have got to be careful about connecting the dots. But, yes, the answer is -- and it's not mechanical, but it's electronic triggers that are in place.
SANCHEZ: Got it.
Hey, Ted -- hey, Ted, I'm going to hold you for just a moment. Don't go away.
I want to bring in one of my -- I want to bring in one of my colleagues who is following this as well.
Pam, who do we have? I'm sorry.
Christine Romans is standing by.
Christine, I understand you have got some news for us. What do you got?
CHRISTINE ROMANS, CNN CORRESPONDENT: Well, we're following and trying to figure out what kind of technical angle there could be to the huge drop, and Teddy's absolutely right that one of those components, it looks like -- Procter & Gamble is in the Dow Jones industrial average. So, if that one were moving pretty dramatically, it would drag the whole average down.
And then of course that would spook other people who were watching and were saying, hey, wait a minute. What's happening here in the Dow? But there's no question that we have been watching for weeks now, but over the past several days in particular, what's been happening with Greece.
And I want to make a real quick point here, Rick, that this is about Greece, but Greece is less than one-fifth the size of California, so why -- why are we worried about contagion from Greece? Well, we're worried about what has been called the PIIGS, Portugal, Ireland, Italy, Greece, and Spain. They are countries with huge debt loads and all of them -- many of people are worried about European bank exposure at really the worst time to have banks be coming under a debt crisis.
SANCHEZ: Well, but...
(CROSSTALK)
ROMANS: Angela Merkel, the German chancellor, this morning, she said something that I think is very interesting. She said, this is about Greece, but this is nothing less than the future of Europe, how well they handle containing Greece's problem, Greece's debt fire right here.
So, everyone knows that it's a very small world, Rick. We're all interconnected. These banks are all interconnected. When you have companies that fail, like we did in this country, you have a bailout. When you have countries who fail, you have other countries who are very concerned about how to bail them out and contain the fire.
SANCHEZ: Yes, we saw the protests. In fact, we showed them here on this show yesterday, as -- the protests on the streets of different cities in Germany, as they heard that Merkel was actually going to come -- create some kind of bailout for -- for another country, which was upsetting the folks.
So, there's know question it's having an effect all the way around.
But before -- before we do anything else, just to make sure, there -- so, there could be two things that could have sparked this sudden sell-off, and it was a combination of the situation in Greece, involving the situation in Europe, with what was going on in Procter & Gamble as well, and that included some of the triggers and some of the electronic triggers that sometimes force a market to go either spiraling downward or upward all of a sudden?
(CROSSTALK)
SANCHEZ: Is that a fair assessment?
ROMANS: I would say even more than just two things. I would say -- we're investigating whether there were technical triggers or technical trading that contributed to the decline. We don't know yet.
The New York Stock Exchange has not told us yet what exactly was happening. There, Teddy Weisberg on the floor with Seaport Securities is saying that there was something -- something up with Procter & Gamble...
SANCHEZ: Right.
ROMANS: ... again, kind of complicated, but how that is being traded.
But don't forget as well, there's another thing here. You have had people for weeks, for weeks, who have been saying we need a 20 percent or 30 percent correction in this market, in the stock market, and they were looking for any kind of reason they could think of, because stocks are up 70 percent over the past year.
They have had a huge rise. So, even as some people were saying, I swear to you, the Dow's going to 14000, you had an equal number of people, Rick, saying, I swear to you the Dow has got to come unglued, and it could be Greece that sparks it.
SANCHEZ: Well, it's interesting, because we almost watched it come unglued for a while, although it seems -- seems a little bit under control right now. I'm looking at that number -- What does it say back there? -- 404.
(CROSSTALK)
ROMANS: It's down -- it's down about 3 percent.
SANCHEZ: It's been staying there, health care for a little while.
I want to do this. I want to take you now to Greece.
Diana Magnay is watching that story for us. Boy, she's been doing just unbelievable work. She's been on the streets of Athens as some of these protests have broken out. And she's joining us now to take us through this.
Diana, let's do this. Well, I suppose I should ask you, first of all, what is the situation there right now? And then I'm going to ask you to, if you would, do play-by-play of some of that video that we got about 40 minutes or so ago, when all hell seemed to be breaking loose.
First of all, Diana, what's the situation there now?
I was told moments ago that we had Diana Magnay standing by, but I'm not sure. I'm not hearing her voice. Give me some -- give me some help in the control room there, guys. We got her or not? That's a no. OK.
Christine, we're going to try and get her in there in just a little bit. You were mentioning as you were -- let me get Teddy back in here with Christine. And, Paul, if you're still in there, that -- you're welcome to (AUDIO GAP) as well.
Hey, Diana.
Now I'm hearing Diana.
Diana, are you there? This is Rick Sanchez. We're on the air here in the United States.
DIANA MAGNAY, CNN CORRESPONDENT: Hi, Rick. Yes, I am here.
(CROSSTALK)
SANCHEZ: Diana, would you -- would you just take us through what's going on there right now? And then I will come back and I will ask you, if you could, to do a description or a play-by-play, if you will, as we call it over here, of that video that took place about 40 minutes ago. But, right now, what's happening there between the police and the protests?
MAGNAY: Well, the protests have completely dispersed.
We have got an update from police. All the protesters -- and there were thousands of them on the streets of Athens -- do seem to have dispersed. And now it's just a question of picking up litter.
I'm back in the main square before the parliament building, where you would have seen those pictures. As you say, 45 minutes ago, this was filled with protesters standing off against police. It was a very tense situation for an hour or so, with the protesters chanting at police. Then they started to throw bottles, and the situation became more and more tense.
And then, suddenly -- and I didn't see what it was, Rick, but, suddenly something ticked it off, and the police pushed back at the protesters, and everybody started running to exit the square.
And, essentially, what happened, it was just (INAUDIBLE) at the square. The police fired tear gas into the demonstrators, and everyone disappeared down the side streets, and eventually dissipated, Rick. That's what happened.
SANCHEZ: Oh, my goodness. And there goes the market once again. We were in the 300s a little while ago, and now we're down in 485.
We're just kind of going to watch this thing together -- 491. It seems to be going in the opposite direction that we want it to go.
As we watch this, let me bring Diana back.
Diana, as you are there, could you describe to -- could you describe to the folks here in the United States what it is that's causing this -- this ire there in Athens with the Greek people?
MAGNAY: Well, what it is, is that the Greek government is trying to implement some very, very harsh spending cuts. They have a massive public debt, which they cannot service. They have got some maturing bonds coming up which they can't pay back. They have had to beg the IMF and the E.U. for help, and the IMF and the E.U. have imposed a very, very strict spending cut program on them. So that means, if you're a public servant here in Greece, you're going to have to suffer huge salary cuts, cuts to your pension. You're going to be asked to retire much later than you would have done before. And the cost of living in general is going to go up, so that's what people are unhappy about.
And they say, you know, we have much lower base salaries than the rest of Europe. The cost of living here is very high, and going to go up higher and we can't afford it anymore. And they want the government to kick back on those measures, Rick.
SANCHEZ: Who messed up? Who caused this? Was it the people? Was it the government? Was it the tax system? Or was it, as many claim here in the United States, that many of the bankers got greedy and came up with screen -- schemes that just didn't work?
MAGNAY: Well, it was a combination of factors, essentially huge fiscal mismanagement on the part of previous administrations. And, in fact, the prime minister in parliament today was talking about the fact that between 2004, 2009...
SANCHEZ: All right. That's Diana Magnay. It looks like she just went out. She's been doing -- as I said moments ago, I will tell you, she's been doing a heck of a job following this story. She's actually been there on the streets in Athens filing live reports as this thing develops.
Back to Christine Romans now.
Christine, the market seems to be all over the place. But...
ROMANS: Mm-hmm.
SANCHEZ: ... at least in the past -- it seems to me, like in the past 20 minutes or so, it's kind of held between 300 and the 400 mark. And for a -- for a moment there, it looked like we were toying with the possibility of getting into below 500.
How do you follow this if you're a trader? I don't know if we have still got Ted Weisberg back on.
ROMANS: Sure.
SANCHEZ: If you're a trader, what do you do at this point? Do you just hold your breath? Or do you get in, or do you get out? What's going on with investors today all over the country?
ROMANS: Well, you know, well, let me say something first, Rick. Like, if you're an investor, you have got 36 more minutes of this wild trading day. There's nothing for you to do. I mean, you're -- you're sitting here and watching this, and this is all the big money and the big guns who are in there trying to figure out what to do.
And in many cases, it's computers that are seeing movements in different stocks and -- and the relationship between different kinds of assets, and the computers are making these decisions. Remember, we have trillions of dollars of trades that are happening in a nanosecond in some cases.
SANCHEZ: Yes. In other words -- in other words, just to make it clear for those out there who only look at their 401(k)s and don't do any direct trading, there are deals that happen when someone says, when stock A hits this number, I want to sell or I want to buy.
ROMANS: Yes.
SANCHEZ: Correct?
ROMANS: That's right. And it's not when someone says.
It's when the computer program says that this relationship has happened, and then that's what the trigger is for a stock.
SANCHEZ: Right.
ROMANS: Now, I want to be clear that, for the next 30 minutes, it's going to be -- you know, it's going to be pretty iffy here. We have had something called the fear index over the past few days that has spiked higher.
And what that has told us is that the fear in the market of a big decline has been building. The market has been telling us that there is something happening here that's going to hurt the -- the price of stocks. And that's exactly what's happened here today. So, you have got the fear index. This gauge of unease in the market has been really running hot.
And that's something that's got traders and professional traders pretty nervous here. We're continuing to follow what happened in Procter & Gamble. About 2:45, a little bit before then, it dropped precipitously. Trying to figure out what exactly happened on -- on trading of Procter & Gamble, on one of these regional exchanges or elsewhere that caused that one to drive down.
Because P&G is in the Dow, that means the whole Dow went down, because you use that stock. It's only one of 30 stocks in there. And Teddy Weisberg on floor was saying that -- that there was something there. So, we're trying to get a sense of what -- what is happening there.
The New York Stock Exchange saying there is not a computer glitch, per se. Everyone is kind of a running around to see if there was something technically related that might have exacerbated the decline.
But 482 points is a big drop for the Dow. It's more than 4 percent. And it takes a big chunk of the year and recent gains away from investors, so it does matter to you and me, because some of the gains we have been able to recoup over the past year are being lost here right now. A 500-point decline in the Dow is big news.
The last half-hour of trading also tends to be more volatile, especially, Rick, when you have that fear gauge I was telling you about that is running so hot. So, we could expect maybe some volatile trading here as people and professional investors try to figure out what to do next.
SANCHEZ: Well, let's do this.
I'm just going to just try and sneak a break in. It looks like things are at least somewhat manageable at this point, if you can even use that word on a day like this, Dow 507, the situation in Greece frightening, the situation with Procter & Gamble suddenly dropping as well, confusing.
We will try and work our way through all three of those developments and bring you the very latest on this story, as RICK'S LIST continues. I'm Rick Sanchez.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back. I'm Rick Sanchez.
For those of you just now joining us, I will tell you, it's been incredible to watch what -- this roller-coaster ride that's been taking place on Wall Street that may have very well been precipitated by what was going on in Athens, Greece.
Look at the market. It's been hovering between the 390s and the 490s really and kind of staying in there. This is where we're getting to crunch time right now, though, because, over the next half-hour, we're going to see what this market does.
And the frightening part is that, about 45 minutes ago, this thing took as big a drop as I believe we've seen, right? Guys, in the control room, am I right? Was that as fast a drop as we've seen in the market in, what, decades, Angie? Since 2008, at least. OK so, certainly not decades.
As we -- as we get everything together here, let me go to Poppy Harlow. She's joining us now as well. Hold on. Before Poppy, I got some numbers here.
The biggest-ever one-day point decline with 707 points on September 2009 -- of 2008. Today, the DOW plummeted 997 points. So, this is -- this is a bigger drop than what we saw in 2008, then, wasn't it?
POPPY HARLOW, CNNMONEY.COM: That's exactly right, Rick. We're looking a market, you see traders behind me, all talking about Greece right now. But the market, you're right, down 770 points. That is where we closed in September of 2008. What's very important to remember here to keep it all in perspective is that we are not there right now.
And looking at the numbers, the DOW is down 390 points. We're just about a little less than half an hour away from trading. If we don't close near 777, that is what is critical. Yes, the market fell precipitously over 900 points, but it has bounce back in a major way. And that is what we need to pay attention to, where are we going to close? Also, on the topic of Greece we've had a bull market run for months. There is the fact that this market a lot of traders say was due for a correction. We were overrunning the economic fundamentals. The fact that 10 percent of Americans are unemployed and many more underemployed, the housing market is reeling. Stocks were not reflecting that.
And what is happening in Greece makes traders realize that their concerns spread around the globe very quickly and our economy, our broader economy, Rick, is not fundamentally that strong yet.
SANCHEZ: Well, but then there's the one issue you didn't talk. And that's the Proctor and Gamble side of this story.
HARLOW: Right.
SANCHEZ: Let me tell you something.
HARLOW: Sure.
SANCHEZ: I just asked that we contact them and I was hoping they would come on and take us through what the story is with them, because there's still a lot of confusion, but I was just told that we're going to get a statement from them any moment now, and let me just update here to see if we got it.
HARLOW: Yes.
SANCHEZ: Let's see if we got that statement from Procter and Gamble. I'll share it with you. In the meantime -- boy, these computers are never fast enough. We don't have it yet. I tell you what, you tell us --
HARLOW: Yes.
SANCHEZ: -- you tell us what effect you think Procter and Gamble may have had on this.
HARLOW: We're trying on CNNmoney.com and our whole team in the CNN newsroom digging on this one. I'm about to go down and talk traders about Procter and Gamble.
But think about it, it's a consumer oriented company that makes everything from toothpaste to laundry detergent. And what happened is it's a widely traded stock, the DOW component fell 50 percent in five minutes when we saw the Dow Jones industrials fall 900 points.
It's highly unusual for Procter & Gamble to fall like that especially given the fact that this is not a volatile stock generally. We're not talking about a big bank that got a bailout. We're talking about a consumer products company, Procter and Gamble falling 50 percent in five minutes not long ago.
That may have triggered the bigger selloff because people wanted to know why it would happen, Rick.
SANCHEZ: And they don't know why at this point.
HARLOW: That's exactly right.
SANCHEZ: By the way, you say it fell 50 percent. After falling 50 percent, did it recover as well? Has it come back?
HARLOW: David, let's pull up P&G stocks. Looking at P&G, it's recovering, it's down -- yes, it has recovered certainly quite a lot, rick, looking at that stock. It has, as the broader market, made up more than half the losses it saw.
That is the big question I had down on the floor. I'll try to get down there before the end of trade -- why is this happening? Heading into trading tomorrow, the final trading day of the week, Rick, when investors don't want to hold their positions over the weekend, could it be for tomorrow. That's a big question.
SANCHEZ: Wow. I was checking, Chad was looking at some of those numbers for us, you said Poppy it was 50 percent in decline and now it's only down three percent in decline.
HARLOW: Exactly right.
SANCHEZ: So, it looks like, as Procter came back, the DOW also seemed to come back, the market in general.
HARLOW: Rick, if we can for a minute to stalk about this Greece issue and why we care about it and why every trader here is talking about it.
SANCHEZ: Yes.
HARLOW: It is because it hurts American companies, and it hurts American companies and we talked about it yesterday because it makes our dollar stronger. And that may sound like a good thing, but that's really hurting this marketplace here.
Debt in Greece as a result, there's a whole society unnerved, and American companies trying to sell their goods overseas as people flee away from Greece's currency, the Euro, and jump in the U.S. dollar makes everything that we export in this country more expensive and it makes people less likely to buy it.
And it sounds simplistic, but it really matters to the marketplace, and that's what you're seeing here.
SANCHEZ: And you're starting to hear the "D" word and that's frightening. I'm reading now from an Associated Press report, written by their business department, and they're quoting a fellow, you probably know who this is, I don't, Peter Bookmar (ph), he's an equity strategist at Miller Pabit (ph).
He says the market is now realizing that Greece is going to go through a depression, a depression, over the next couple of years. Europe is a major trading company of ours and this threatens the entire global story. I'm not an economic business writer and expert but I know enough to know when people start hearing the word like "depression" it must cause some kind of fear.
HARLOW: I'm very, very surprised to hear that word used in this context, because there's a fear contagion, there's a fear that spreads. But we're not just talking about Greece, here, Rick, and I think this hasn't gotten enough attention.
You've got Spain and Portugal are in a similar, not as bad a situation, but the rating agencies in this country have downgraded their debt, making it more expensive for them to borrow money. That is exactly what happened to Greece not long ago and then it precipitated and it fell more and more into the hole, and now it's getting a $145 billion, $146 billion bailout.
You have Spain and Portugal and what they call the PIIGS, Portugal, Italy, Ireland, Greece, and Spain, that are all concerns, and those are all major European nations that we rely for doing business. What happens to them matters to us. That's the bottom line. We are an interconnected economy, and you see that playing out now on Wall Street.
SANCHEZ: Stephanie Elam is joining us now on the floor and she's got a part of the story she's following as well. Are you there, Stephanie? You know, have you talked to any of these traders? Have you gotten any sense from them what the reaction was like down there and what may have triggered this?
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: I have swapped a couple of e-mails trying to get some information on what was going on. I'm not on the floor, as you know. I'm, like, eight months pregnant, so luckily Poppy ran down there for me.
(LAUGHTER)
But what I'm gathering here is there was a sense of uncertainty and fear and that's what led into what we're seeing. The traders looking at the markets and watching the board as this was falling precipitously. But a lot had to do with the uncertain what was going on with Greece.
And part of the issue here, too, when you look at this, and I think this also freaked people out besides the speed with which we saw the drop on the DOW which was just hugely fast, was how will this be contained because the European Union has spent so much time trying to contain this issue with Greece if there are problems with these other countries which we've heard is called as the PIIGS, like you just heard Poppy saying, Portugal, Ireland, Italy and Greece, and Spain.
And if there are other ones, will they have enough resources to contain this debt crisis to the European Union. There are 16 countries that now share this one currency. That is the fear here.
Remember, we saw it already, Rick, with what was going with our economic plight a couple years ago. That didn't stay contained to our economy. We're all interconnected now because we have so much trade and investments done back and forth, a lot of U.S. banks own debt from countries on the other side.
That all factors and that's part of the reason why you see them so concerned about what's going on with Greece as the austerity measures are being implemented and they are so upset about it, which I get.
If someone was saying to you here's what's going to happen because the Greek government didn't tell you what was going on, now you'll have to pay more for your consumer goods and be older to retire for some women out there, and take pay cuts, that's a lot to digest, and that's why you have these people on the streets of Greece upset about that.
That fear and nervousness, whenever there is uncertainty, Wall Street doesn't like it, and that's what we saw play out here for a big part of it today. It's weird to say to you, Rick, that it's actually somewhat calming to see the markets only down 380 points after we were down 900-some earlier.
SANCHEZ: Trust me, I get it. We were all watching it together, and like I said, I think I alluded to watching a lead balloon drop, which is what it seemed to be doing there. And when it hit 900 and was getting almost at the 1,000 mark, one started to wonder, you know, is this going to, you know, precipitate some kind of circuit breaker.
It didn't. That would have been I think the numbers for it to do that had to be at 2,150-point decline, or 20 percent of the market, which it wasn't, nor do it come close to doing that, for the record. But when it starts to get to the 1,000 mark, you wonder if the market itself will click into some of these circuit breakers that we've seen in the past.
We want to talk more about Procter and Gamble and what is going in Greece. If you missed the pictures we will show you what happened in Greece that some say caused the reaction on the floor there as well.
And we are now 20 minutes away from the close. And you'll see it live as it happens here. Volatility on Wall Street.
This is "RICK'S LIST." I'm Rick Sanchez. We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back. I'm Rick Sanchez.
Talk about volatility in the market. It was something about 2:30 in the afternoon when all of a sudden we started to see that there was something going on with the market. It had gone down first a couple hundred points and then 200, 300, then 400. Then, like, the bottom just fell out.
We've put this together for you. In case you missed it. Here we go. This is time lapse that we've created so you can see it. Look at this thing. Look at this thing -- 600, under 600, heading for 700, heading for 700. And then it came back.
I don't know, did we see the point there where it was -- let me just stay with this and see which direction it goes, because there's so much movement there all at one time. Then it goes to 500. Now, it's back to 400. Remember, at one point it was almost at 1,000. At one point it was almost at 1,000, it was 998 where this thing really hit.
I think we missed the very beginning there. But at the beginning of that part, that was the part that made people go, oh, my goodness, what is going on here?
Are we going to do it again? Let's do it again. All right, we're starting high, OK. All right, whoever put this thing together, started it at the bottom, which obviously -- so we're showing you the good part of this market today, folks. This is on its way back. We didn't want to frighten you and show it to you on the way down.
All right, let me bring in -- let me bring in -- oh, do you know what, and this is also very important, because I think this is a very important part of this story. For every yin in the market there's a yang, and a lot of folks have been saying, well, operate they are side of the Greece story is, that even though it might affect our market and have it go down, as it did today, according to some, it could actually help the dollar.
Well, guess what. Look what I was just handed. The dollar has soared as stocks hit a free-fall. The dollar skyrocketed to a 14- month high today versus the Euro after the blue chip DOW stock index sank almost 1,000 points before rebounding. So, who would have guessed it, right? Who have thunk it, as some would say?
I want to get back to Poppy Harlow. Poppy, you have new information on the Procter and Gamble thing and how that may have had an effect on what was going on here as well as maybe the Greek debt crisis, right?
HARLOW: Let's start with Procter and Gamble. I talked to two traders on the floor and said what happened with P&G? I said, was it is a computer glitch? One of the traders told me, no way, this wasn't a computer glitch. This is what happened. This is the new market. This is how the markets are regulated by the SEC, et cetera.
However, he said we've seen the rebound, and looking at Procter and Gamble shares only down two percent, so this is not a problem with Procter and Gamble fundamentally, the company.
But what the other trader told me is, listen, this market and investors were waiting for an opportunity -- and what you're looking at now, by the way, folks, that is the precipitous decline that we saw in the marketplace just an hour or so ago.
SANCHEZ: Look at that.
HARLOW: It's amazing to see, Rick, but thank goodness that we did come back. But, listen, the trader said this is the herd mentality. People were waiting for a moment to take some money off the table, and Greece and the protests and the violence and the bailout, that was the moment.
And that is what traders have done here. They've taken their money off the table. This market was overrun according to most. They have pulled back. They have issued those stop orders, you were talking about that, when they can literally stop their orders and stop their order and buying and say, you know, hold off.
And, again, my fear, I reiterate it, Rick, what happens to the market tomorrow? What happens before the weekend when people don't know what will happen in Europe? What happens when Asia markets open here in just a few hours?
SANCHEZ: We'll be watching.
In the meantime, we still have 14 minutes left in this market. We want to see if it will close up. We want to see what many say precipitated this, and that is the situation there in Athens, Greece. Our correspondent Diana Magnay is joining us live, not by phone, to bring us up to date on what the situation is there. Diana, you have the floor.
DIANA MAGNAY, CNN CORRESPONDENT: Hi, Rick, well, as quickly as the DOW came back up, the streets here have cleared, cleared of protesters. When I came back into this street, there were riot police still here into the main square before the parliament building, and now they've all gone.
So all that is left is quite a lot of debris and the street sweepers are clearing that up. So it wasn't very long ago that that square behind me was filled with thousands of demonstrators chanting against the parliament building, calling them thieves.
Then suddenly that situation exploded, and the police pushed forward into those demonstrators, who all rushed down these side streets, us along with them. But essentially they just dispersed, then, Rick, it was a very quick thing, Rick.
SANCHEZ: These folks protesting, those who were scuffling for police there for some time, how would you characterize them? How would you describe them? Are they government workers? Are they people from villages? Help us out, if you would.
MAGNAY: These are people who belong to the two main unions, public and private sector, and also a left-wing union called the Parma Union. All three unions called on their workers to come and demonstrate in front of the parliament today because of this austerity package that was ratified by lawmakers in the parliament building today.
So, you had doctors there. You had teachers. You had quite a lot of people working in the private sector as well. All of them are very angry because what's going to happen to them is that their salaries are going to be cut, their pensions are going to be cut, and especially women are going to have to retire a lot later. So a lot of anger about those measures, particularly because people here in Greece say that they have a very low base salary in the first place and these cuts are going to make it very difficult for them to live especially when the government is going to raise taxes as well, Rick.
SANCHEZ: Well, they're being asked to make sacrifices, and it was expected that they might be. And it was also expected that they would not react in a positive manner.
But some of those pictures that you shared with us -- by the way, put those back up, again, if you would, Roger, those pictures that we showed you right there, that's not the present condition in Athens, that's what it looked like about an hour ago when this thing really hit the fan.
In the meantime, I've got two developments for you. Diana, thank you very much for bringing us up to date on that. And we'll try and check back with you during the course of the next hour.
These are two, I was mentioning moments ago that there were reactions to the market, I have two of them for you right here. One, the dollar has soared today. The dollar has skyrocketed to a 14-month high, something some people said could be a reaction to what's going on in Greece.
By the way, a 14-month high versus the Euro, which is why it has the Greek effect.
And here's another one for you. As I go to break, let me share some new news with you. Gold has hit a five-month high of $1,200. Gold surged past the psychologically significant 1,200 mark on Thursday as stock markets plummeted and investors sought a safe haven. Two reactions to the stories that are going on right now.
Stay with us. We're ten minutes away from the market close, and we're going to take you through it right here on "RICK'S LIST."
(COMMERCIAL BREAK)
SANCHEZ: Welcome back. I'm Rick Sanchez.
All eyes on the DOW to see how this thing closes out. Boy, what a -- what a reaction there's been there to the situation in Greece. As those pictures came in to some type of fluctuation. Look at that again. Give me a shot of that if you possibly could. I want the viewers to see what happened to Procter and Gamble.
Procter and Gamble literally hid a sudden peak in the middle of -- look at that -- that's the DOW we're looking at now. Sorry about that. They changed the thing on me. That's the DOW right there. Look at that downward peak. It went down, then went bang almost all the way up, but it hasn't come all the way up.
Where is it now? It is standing around 289, which I know it sounds like a bad day on the market, but considering what it could have been not so back.
Christine Romans is joining us now as well. She has been following this. Christine, as we count down the next six and a half minutes, what's your take on this?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: My take is this is an unbelievable recovery from that worst level. I want to know exactly what happened in Procter and Gamble's shares. We have calls out across the country to regional stock exchanges, to the SEC, to Procter and Gamble, to find out why that stock got cut in half and in a heartbeat the whole market fell to those lows of the day.
And for the market to be down, Rick, two and a half percent after being down almost 1,000 points is just incredible, that kind of a pullback and rebound in the market. Remember, you've got -- you mentioned -- I wanted to put some context about some of the reactions.
You were also mentioning gold spiking, the dollar spiking to a 14-month high. The dollar has strengthening against the Euro in past days. We've been seeing it happen. It's actually raced some concerns among economists about hurting the American recovery, because that strong dollar, a relatively weaker dollar had been something that was helping American exports and maybe helping American jobs.
So very closely watching those big moves in the dollar. The dollar is now the strongest of the Euro since March, 2009 in over a year, watching the relationships in all of these markets.
And I want to really reiterate here how much computerized trading is happening. You have what we call algorithms or the quantitative analysis people who make computer programs that trade a lot of money in a heartbeat, in nanoseconds.
And I suspect that as that market was declining, it wasn't people looking at their screen and saying oh, boy, we have to sell. It was computers, Rick, selling for them, and people trying to catch up.
SANCHEZ: Christine, we may have something on that. Poppy Harlow has an update on the Procter and Gamble sudden decline as well. Poppy, are you there? What do you got?
HARLOW: We got some -- we just got some notes from Art Hogan, the chief market analyst at Jeffries and Hogan, a big Wall Street firm that's obviously been in this business for quite a while.
And what Art said, and the New York Stock Exchange says there was not a computer glitch, but Art is saying there had nobody a glitch. We'll find out later that someone hit the wrong button. The reason he's saying that is because he said there wasn't a lot of volume, there wasn't a lot of trades being made when the DOW fell so much.
Sometimes the lack of volume means that smaller moves are seen on a wider scale. However you have conflicting opinions, here, some traders say there was a computer glitch, some traders saying, no way, this is just the market. He told me to watch the S&P 500 very closely. Why is that? The DOW industrials, they only have 30 stocks that are considered. The S&P 500 is a much broader look at the stock market in general, obviously, with 500 different companies involved. If there's any way to pull up the S&P, that would be great.
It's off about three percent, it's at 1,132. The chief market strategist at Jeffries told me, and I'm quoting him here, "If we close below 1,133, where we are right now on the S&P, tomorrow will be very bad."
That's what they call a key support level. You have the support levels that traders look at, whether it's the DOW, whether it's the S&P, and if we close below there, he's very concerned about what happens to this market tomorrow.
That said, Christine is exactly right to say the fact we have come off from a nearly 1,000 point decline to being off 334 points is just phenomenal.
SANCHEZ: But there's one thing you just said that I'm not quite sure I understand, and that is how it is at this point we still don't know if the situation with Procter and Gamble was expedited by computers or not. Why is that so hard to nail that down? Why don't they know that on the floor?
HARLOW: I'm not on the floor. But the two traders I talked to on the floor, they don't know. But you again, Rick, you haven't gotten a comment from Procter and Gamble, have you?
SANCHEZ: Let me go back to the computer and check. Angie, have we got it yet? No. They promised a statement, and we should be getting it any moment action, and we're still waiting for it. So if Procter and Gamble's public relations folks are listening to us right now on the air, just let us know. We'd be happy to release that statement for you.
HARLOW: Just to be clear here and fair to Procter and Gamble, there's nothing about this stock at this point in time. This company hasn't made news in the last week in terms of having any big issues. This may not be a Procter and Gamble specific issue. We just don't know.
And therefore, we don't want to say we know. We don't know if it was a computer glitch. But what we know, yes, that stock was off. It was actually off about 37 percent at its lows, and now off only two percent. And that's what matters is where this stoke closes today, not necessarily the fall it had. We'll way to hear from P&G.
And sometimes you don't find out until the next day for for a while if it was a computer glitch or not. We don't want to assume it was or it wasn't.
