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Retail Investor Bails: Monday’s Outflow Biggest Since Flash Crash

Retail investor outflows from UBS accounts totaled $1.3 billion during Monday’s 600-point plunge in the Dow Jones Industrial Average, making it the second largest one-day rush for the exits since the infamous May 2010 ‘Flash Crash.’

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Outflows over each of the previous four days totaled more than $500 million, making it the largest consecutive days of outflows ever recorded, according to the note from the UBS trading desk obtained by CNBC.

“We have been informed our competitors also experienced record retail volumes,” said the note.

The S&P 500 lost 6.7 percent of its value on Monday, as investors continued to shed risk following the downgrade of U.S. sovereign debt by Standard & Poor’s. A surge in bond yields for Italy raised concern about the cost of yet another euro-zone bailout, adding to the selling pressure.

The Dow’s 635-point drop was its sixth largest ever and also brought it below 11,000, a key level watched by retail investors.

The fall by the index, which closed at its low for the day, represented the biggest intraday drop since the so-called Flash Crash on May 6, 2010, when the benchmark lost 998 points in a matter of minutes.


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