Dow Falls Off a Cliff in Final Minutes of Trading

If you blinked in the final minutes of trading today, you probably got the story wrong.

The final hour of trading has become known for its wild swings, but outdid itself this time: After being up about 250 points at 3:54 p.m., those gains evaporated and the Dow Jones Industrial Average ended down 74.16, or 0.8 percent, at 8990.96.

The S&P 500 shed 10.42, or 1.1 percent, to  end at 930.09, while the Nasdaq, eked out a gain of 7.74, or 0.5 percent, to close at 1657.21.

A lot of traders blamed General Electric (parent of CNBC.com) for the late selloff after comments by CEO Jeff Immelt about the company's outlook were interpreted to mean no growth. But GE said the comments were taken out of context and that he wasn't rewriting the forecast. And, even if he was, a deeper dig into the math shows one headline probably couldn't move the market that quickly anyway. (Nevermind GE stock, which ended near the middle of the Dow pack.)

The truth is, as many readers and pundits have begun to point out: There aren't any concrete reasons behind the market swings. Trading has become like an episode of "Seinfeld" — it's about nothing.

The whole day was pretty volatile, with stocks rallying ahead of the Federal Reserve's decision on interest rates, then pulling back after the central bank announced it would cut a key interest rate by half a percentage point, then swinging up in the final hour, only to end down.

On Monday, it was the opposite: Stocks took off like a bottle rocket in the final two hours of trading, sending the Dow up 889.35, its second-biggest point gain on record.

Bernard McSherry of Cuttone & Co. said he thinks we’re forming a bottom.

“I’m not saying that we’re not going to retest it but for the first time in a long time, I’m feeling some optimism down here," McSherry said. “We were talking about systemic failure a two weeks ago. I’ll take a recession and some bad earnings for a while over that.”

Indeed, the optimism seems to  be translating into some buying.

As this October, one of the worst on record for stocks, draws to a close, some investors are starting to follow Warren Buffett's lead and make some hefty moves out of Treasurys and into stocks, according to Sean Murphy, Treasury trader with RBC Capital Markets, told Reuters.

General Motors was the biggest gainer on the Dow following news that the auto maker and Cerberus Capital Management have resolved their major issues, clearing the path for a GM-Chrysler merger.

Health-care component Johnson & Johnson lost 4.1 percent after JPMorgan downgraded its rating on the stock.

Intel , JPMorgan and Citigroup were the biggest drags on the Dow.

(Track all 30 Dow stocks.)

Financial stocks overall were mostly lower, though there were a handful of standouts, including CIT Group , which jumped 20 percent, and UBS , which rose 3.2 percent.

Today's economic news was slightly encouraging: Orders for durable goods, which are items such as cars and appliances that are meant to last three years or more, rose 0.8 percent in October. Economists had expected a 1.2-percent decline. The increase was largely due to a rise in car and plane orders. Excluding transportation, orders for all other durable goods fell 1.1 percent.

That gave Boeing a boost; shares of the aerospace giant finished up 1.8 percent.

Crude oil rose nearly $5, settling at $67.50 a barrel, after the EIA reported crude inventories rose by 500 million barrels, less than expected, last week.

Kraft fell 1.4 percent after the company posted slightly better-than-expected earnings, helped by price increases and new products that boosted sales. The company, whose brands include everything from Ritz crackers to Maxwell House coffee, backed its full-year earnings forecast.

Procter & Gamble shares fell 3.5 percent after the company, which makes everything from Tide detergent to Pampers diapers, beat expectations, reporting a 12 percent increase in earnings, but lowered its sales forecast for the year.

We're at the halfway mark on earnings -- 246 of the S&P 500 have reported third-quarter earnings. So far, 61 percent of the companies have beat expectations, though the actual numbers are still abyssmal: Combining actual earnings and estimates, the growth rate was minus-23.8 percent.

>> See complete earnings coverage.

Corning shares fell 8 percent after the specialty glass maker said its fourth-quarter earnings would miss Wall Street's target by a long shot and that it would shutter some plants amid slowing demand for flat-screen televisions.

Apple gained 4.6 percent after a Sanford Bernstein analyst said the iPhone maker is in a great position to buy back stock.

The Treasury Department met with privately held banks Tuesday to discuss ways they could get access to funds from the government's $700 billion financial rescue program, according to Reuters.

GMAC, the auto and mortgage finance company, said Tuesday it had been approved to use the commercial paper funding facility created earlier this month by the U.S. Federal Reserve with the aim of easing pressure on the corporate credit market.

This Week:

WEDNESDAY: Fed announcement on interest rates; Earnings from Visa after the bell
THURSDAY: Weekly jobless claims; First look at Q3 GDP; weekly natural-gas inventories; Eanrings from AstraZeneca, Colgate Palmolive, CVS/Caremark, ExxonMobil, Motorola, Royal Dutch Shell and Electronic Arts
FRIDAY: Personal income and spending; consumer sentiment; Fed's Yellen speaks; Earnings from Chevron, Clorox and Nissan

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