The Dow's 1,000-point plunge: What happened?

In the middle of trading on Thursday, the Dow plunged so quickly and so sharply, that many commentators — including Jim Cramer on CNBC (see video below) — suggested a bizarre technical mishap must have been to blame. At around 2 p.m., in the middle of what had been a fairly average session, the Dow suddenly dropped nearly 1,000 points, constituting its worst intraday fall since 1987. Then, again in a matter of minutes, it bounced back most of the way to even. The sudden, enormous moves left market observers baffled. It must have been "a glitch in the tape," Cramer hypothesized on CNBC. "The machines failed." While the New York Stock Exchange has reportedly denied having technical problems, CNN Money says that "faulty" stock quotes were at least partly to blame. Either way, investors are "spooked," says Matt Phillips at The Wall Street Journal. They have reason to be: At the close of trading, the Dow still down nearly 350 points. Watch a video of CNBC's broadcast during the plunge: