What Were the Worst Days Ever on Wall Street?

The Dow Jones Industrial Average dropped 376 points today, and while many reports hold the European debt crisis partially responsible, and arguments over the role of new U.S. financial regulations have begun, one thing is for certain: This is far from the biggest drop ever.

Today's drop isn't historic when compared to market crashes in the 1930s, 1980s and 2000s that all saw Dow tumble by significant percentages.

The biggest one-day drop in the history of the Dow Jones, in terms of the percentage of points dropped, came on Oct. 19, 1987, otherwise known as “Black Monday.” On that day, the Dow Jones fell by 22.61 percent, the Nasdaq dropped by 11.35 percent, and the Standard & Poor’s 500-stock index plummeted 20.46 percent, according to the Wall Street Journal Historical Index. The cause of the crash remains controversial, with former Congressman Ed Markey blaming inaccurate models used by the era’s simple computers, and others, such as New York University economics professor Richard Sylla claiming that a crisis in liquidity undermined stock insurance.

But on Black Monday, the Dow shed only 508 points, a record easily beaten by the largest-ever point loss. Almost 21 years later on Sept. 29, 2008, the Dow closed 777.68 points down, a 6.98 percent loss, also according to the Wall Street Journal Historical Index. That day saw stocks in freefall as the world financial system cracked apart following the collapse of the Lehman Brothers Investment Bank. Then, the Dow fell again on Oct. 15, tumbling 733.08 points down, a 7.87 percent loss.

By comparison, the Oct. 29, 1929 market crash that began the Great Depression saw an 11.73 percent drop in the Dow after an even larger 12.82 percent drop the day before. By modern standards, the "Black Thursday" loss of 30.57 points seems small, but the volume of the market was much lower back then. The Depression affected the market so profoundly that it would not return to its pre-1929 volume until 1954.

Oddly enough, huge stock market drops seem to almost always occur in the fall. Of the 20 largest Dow Jones drops by percentage, 13 of them happened in September, October or November, according to the Wall Street Journal Historical Index. Similarly, 15 of the 20 largest point losses also took place in those months. However, because the total volume of the Dow Jones has generally increased over time, the prevalence of days with large point losses in the fall months may be partly due to the fact that many of these days fell during the 2008 Financial Crisis.

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