Mechanical Traders May Be Partly to Blame for Market Fluctuations

Stocks plummeted yesterday, with the Dow Jones Industrial Average falling more than 400 points and Standard & Poor’s 500-stock index closing down 53.24 points, at 1,140.65.  The day was just the latest in a series of  wild swings in financial markets in recent weeks. What’s causing the severe fluctuations? We’re taking a look at how “robot traders” –  computers that are programmed to automatically buy or sell stocks based on a set of criteria –  affect the markets. Could market woes be tied not to human worry, but to machine worry? John O’Donoghue,  head of equities at  Cowen & Company, tells us about high-frequency trading and how it impacts the market.