178-point drop in minute? Not

How did the Dow Jones industrial average manage to plunge a shocking 178 points in a single minute of a very bad stock market session yesterday? In truth, it didn't.

Dow Jones & Co., keeper of the world's most famous stock index, briefly lost track of its industrial average yesterday afternoon. The company said it noticed that the running Dow average value began to fall behind the actual market amid heavy stock trading at about 2 p.m. The fix, however, proved to be an even bigger problem.

Dow Jones decided to move the stock index price-reporting work from one computer server to a backup system to cope with the volume problem, said spokeswoman Sybille Reitz .

As a result of the change, trading activity that had backed up was dumped into the Dow index calculation at once and created the false impression that a more gradual price decline happened in the blink of an eye.

The effect was more than a mere statistical sideshow. The stock market had been in turmoil all day and the Dow average was down nearly 300 points when the Dow Jones computer switch took place.

A drastic plunge in the midst of a jittery market created a new level of anxiety among investors.

Stock trading volume was indeed heavy. About 2.4 billion shares changed hands on the New York Stock Exchange, its second busiest day since June 8, 2006. The Nasdaq Stock Market sent a note to traders yesterday afternoon reporting slow responses to orders sent to the New York exchange. Later, it reported delays distributing some market data.

It was unclear whether similar stock market index problems had happened before.

Once the Dow average hit bottom at 3:01 p.m. yesterday, the index began to recover some lost ground. It climbed more than 200 points in about a half-hour before slipping lower again later.

The Dow Jones average tracks the stock prices of 30 large companies like General Electric Co., Procter & Gamble Co., and IBM Corp.

Steven Syre can be reached at syre@globe.com.