Ahead of the market's open, Dow Jones industrial average futures fell the maximum allowed limit of 550, or 6.27 percent, to 8,224. That triggered "circuit breakers" that automatically freeze selling until the market's 9:30 a.m. EDT open. However, traders can still buy stocks and send the market higher.
The Standard & Poor's 500 index futures index was also down the maximum allowed 60 points, or 6.56 percent, to 855.20, and the Nasdaq 100 index futures was down the maximum allowed 85.00, or 6.20 percent, at 1,175.75.
The big drop in futures trading raised the possibility that circuit breakers intended to prevent panic selling could be triggered during regular trading -- something that hasn't happened since 1997.
The thresholds that would trigger a halt in trading are set at a decline of 10 percent, 20 percent and 30 percent in the Dow, based on where that index was at the beginning of the current quarter; that would mean declines of 1,100 points, 2,200 points and 3,300 points, respectively.
If the Dow Jones industrial average falls 1,100 points before 2 p.m., the market will shut down for an hour. If the threshold is breached between 2 p.m. and 2:30 p.m., the halt will last 30 minutes. Trading would stop again if the Dow falls by 2,200 points. If the Dow falls by 3,300 points at any time, trading would be halted for the day.
Gary Townsend, president and CEO of Hill-Townsend Capital Inc., said a halt in trading was a possibility.
