There have been many bad days for the Stock Market since the Dow Jones Industrial Average began calculating and publishing the Stock Market averages in the late 1800s. The Dow Jones Industrial Average has witnessed the financial vicissitudes of the American Stock Market for over a century. From the panics of the first decade of the 20th century, to the Stock Market crash in 1929 that brought upon the Great Depression, through Black Monday in October of 1987, to the dot-com boom and the latest economic crisis that reached its nadir in 2008. The Dow Jones has seen many large daily drops in points, particularly in the last decade during the latest financial crisis. While some of the historical crises may have witnessed the Dow Jones decline in percentages much more than points because of the much higher trading volume on the market today, the decline in points is what we’re interested in here. This is a list of the ten worst single day point losses in Dow Jones history.
10 August 4, 2011: Dropped 512.76 points
Nearly $2.3 trillion in investors’ total equity disappeared from the NYSE on August 4, 2011. The fear that the United States’ credit rating was imminently going to be downgraded from AAA for the first time since 1941, which it was two days later to AA+, and amidst panic over the debt crisis in Europe, specifically in Italy and Spain, a major sell-off, the largest since the recession of 2008, began. The sell-off prompted a 4.3% slide for the Dow Jones. Still less than a quarter of what the Stock Market lost on the infamous Black Thursday to spark the Great Depression in 1929, but $2.3 trillion nonetheless.
9 October 2, 2008: Dropped 514.45 points
October of 2008 was an unforgiving month for the Stock Market, and with three major market dips within October alone, the fears of a coming global recession were all but confirmed, and officially announced about a month after the first loss on the Dow Jones occurred on the 2nd of the month. Amidst fears over whether the House would vote in favor of the $700 billion bank bailout, compounded by a much worse than predicted loss from Wachovia National Bank and an essentially frozen credit market with banks not lending to anyone, the Dow Jones dropped 514.45 points. October 2, 2008, was the beginning of one of the worst months in the history of the New York Stock Exchange.
8 October 27, 1997: Dropped 554.26 points
The Asian financial crisis that began in July of 1997 was the major reason why the Stock Market lost so many points on October 27, 1997. As Asian stocks plummeted overnight before trading began in New York, a massive sell off began in earnest the morning of the 27th. In fact, the circuit breaker security measure, one which shuts down trading at the Stock Market for half an hour to prevent an overwhelming sell off that could cripple the market, was employed for the first time ever since its implementation in 1988. Even after trading resumed, stocks continued to fall, prompting another interruption, this time for an hour. After stocks had fallen by over 550 points, trading was closed an hour early for the day, with the Dow losing over 7%.
7 April 14, 2000: Dropped 617.78 points
Remember when the dot-com technology bubble first burst over a decade ago? Well, the months of March and April of 2000 were particularly cruel to the technology sector, with the tech heavy NASDAQ stock index to record losses of up to 10%, which didn’t help the Dow Jones as it recorded a series of heavy losses for an entire week that triggered circuit breakers. The NASDAQ’s slide as well as fear over the Federal Reserve raising interest rates, thus causing inflation, ultimately led to the Dow Jones' biggest one day total loss, at the time, of 617.78 points.
6 August 8, 2011: Dropped 634.76 points
The downgrade in America’s credit rating from AAA to AA+ had massive ramifications for global markets on Monday, August 8, 2011. In six hours, over $2 trillion in market values disappeared. Between Thursday August 4, to the following Monday, August 8, over half-a-trillion dollars vanished from the Stock Market. The U.S. credit rating was downgraded by credit agency S&P, and concerns regarding the volatility of the economies of many European nations remained a great concern, making August 2011 the beginning of an extremely volatile second half of the year for global markets.
5 October 9, 2008: 678.91 points
October 9, 2008 was amidst the global financial crisis where markets across Europe opened the day losing up to 10% in Germany, Britain and France, with Japan suffering a similar fate, and Russia suspending their stock trading altogether. In the United States, October 9, 2008 was the day that GM's stock fell 31% and Ford's fell 21% amidst reports that car sales had hit all-time lows, and were going to continue the downward trend. The Dow Jones suffered a near 700 point loss as a result.
4 December 1, 2008: Dropped 679.95 points
Not surprisingly, another date from 2008 is firmly established on this list. The Global Economic Crisis of 2007-2008 saw the ruin, and near ruin of many massive financial institutions, government bailouts on an unprecedented level, and the bankruptcy, eviction or wholesale ruin of millions of citizens. As such, the Stock Market suffered more, albeit in a less dire form, than many people did. December 1, 2008 was when the National Bureau of Economic Research finally declared, after over a year of job loss and economic stagnation, that the United States was officially in a recession with growth not expected for at least a year. The announcement precipitated a near 8% loss for the Dow.
3 September 17, 2001: Dropped 684.81 points
It comes as no surprise that the third worst day in the history of the Dow Jones came within a week of the September 11, 2001 terrorist attacks on America. The shocking and tragic attacks left America shaken, and kept the stock markets closed for a week following the disaster. When markets reopened on Monday September 16, they plummeted immediately, dropping over 7%. Unsurprisingly, the transportation sector lost the most ground that day, dropping 12.8%.
2 October 15, 2008: Dropped 733.08 points
After a period of stagnant lending following the burst of the housing bubble in America, former president George W. Bush announced a plan of government intervention in the financial sector unseen since the Great Depression. By pumping $250 billion of the public’s money into the country’s banks, the U.S. government essentially planned on taking over partial control of the largest banks in America to promote lending. The Stock Market did not respond kindly to President Bush’s news; the day following his announcement the Dow dropped 733 points, the second largest point drop in Dow history.
1 September 29, 2008: Dropped 777.68 points
By the end of the trading day on September 29, 2008 the Stock Market had bled over $1.2 trillion in market value and the Dow Jones had dropped over 777 points, the largest in its history. Following the Lehman Brothers filing for bankruptcy two weeks before, and with banks losing trillions of dollars in mortgage-backed securities due to the value of American homes hitting their lowest since the Great Depression, many at the Stock Exchange expected the House to vote in favor of a $700 billion bailout. The House instead voted against the Emergency Economic Stabilization Act 205-228, spreading panic within the Stock Market and thus precipitating the largest single day drop in points the Dow Jones has ever seen.