Something akin to the Bikini A-bomb wave hit the New York Stock Exchange last week. The first hour of trading on Tuesday started off at an easy pace. Suddenly motor stocks weakened and steels wobbled a bit. Then a flood of selling hit the market. The high-speed tickers fell behind. In the next hour 660,000 shares were traded, almost as many as in the entire previous day.

Lesser waves of liquidation inundated the market throughout the day. When the gong finally sounded, the Dow-Jones industrial average had dropped 5.32 points to below 200 (this market's "resistance point") for the first...

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