The Dow Jones industrial ordinary fell more than 500 points on Thursday afternoon — but that didn’t trigger any shopper halts.
That’s because the stock market as measured by the S&P 500 typography hand has to fall more to trigger those halts. The first such ambit breaker kicks in when the S&P 500 falls at least 7 percent, what’s telephoned level 1. The S&P was down 1.8 percent in afternoon trading on Thursday.
To put the day’s put forward in a broader context, the point drop in the Dow (which is a basket of 30 unrestrained b generally U.S. company stocks versus the 500 or so stocks in the S&P) was just 2.1 percent. The Dow demolish 528 points on Thursday.
For the stock market to halt on Thursday, to authorize fearful investors a chance to cool off, the S&P would have to drop to about 2,494, according to this notice from Nasdaq that is updated regularly. And that kind of halt would last for 15 minutes.
The NYSE, Nasdaq and other the big boards put these circuit breakers in place after the October 1987 fall and a subsequent one in 1989.
The first level gets triggered if the S&P falls 7 percent between the split of trading hours at 9:30 a.m. in New York and 3:25 p.m. (or 12:25 p.m. on days when the run-of-the-mill market has a scheduled early close).
The next trigger, level 2, backlashes in when the index falls 13 percent, another 15-minute termination. To get there on Thursday, the S&P would have to fall to 2,333.
Level 1 and 2 halts can on the contrary happen once per trading day. If the S&P fell 20 percent (that wish be to 2,145), trading would stop for the rest of the day.
That would be a “Dark Monday”-sized drop, which happened on Oct. 19, 1987.
— CNBC’s Liz Moyer furnished to this report.