Stock Market History: the 10 Worst Days

Aug. 9, 2011 -- intro: In the past week, the stock market has suffered through two of the worst single-day point drops in history. Bad economic news has left the New York Stock Exchange engulfed in doubt. And then there're the downgrade of the United States' credit rating and ever-increasing worries that the country is headed for a double-dip recession.

Despite the steep market drops of late, however, they do not even make the top 20 for percentage declines because trading volume is so much larger than in the past. Consider Black Thursday and the other historic days leading up to the Great Depression when as much as a fifth of the Dow Jones Industrial Average stock index disappeared in a day.

Here is a rundown of the Dow's 10 worst days by number of points lost.

quicklist: 1category: Largest Single-Day Loss: No. 10 title: Aug. 4, 2011url: text: Dropped 512.76 points

Fears that the country is headed for a double-dip recession, coupled with mounting concern that Spain and Italy will slump deeper into the European debt crisis, sparked the worst sell-off since the 2008 recession began. The Dow slid 512.76 points, dropping 4.3 percent. And while percentage-wise the market lost about a quarter as much as Black Thursday in 1929, for example, about $2.3 trillion in investor wealth had evaporated by the end of the day.

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quicklist: 2category: Largest Single-Day Loss: No. 9 title: Oct. 22, 2008 url: text: Dropped 514.45 points

The month of October 2008 was one of the worst in New York Stock Exchange history, with three of the top 10 largest single-day drops ever recorded during the month. The ninth-largest drop was sparked by increasing fears of a global recession. Weak corporate profit forecasts, including a worse-than-expected loss from bank Wachovia. Slightly more than a month before an official recession would be declared, the Dow closed with a 514 point loss, shedding 5.7 percent throughout the day of trading.

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quicklist: 3category: Largest Single-Day Loss: No. 8 title: Oct. 27, 1997 url:text: Dropped 554.26 points

Big losses in the Asian markets throughout the night prompted a big sell-off in the U.S. markets. For the first time in history, trading at the New York Stock Exchange was halted mid-day after the market nosedived, triggering a "circuit breaker" that timed-out trading for 30 minutes. The 1988 circuit breaker rule was created to prevent another snowballing selling-spree such as the one on Oct. 19, 1987, when the Dow plummeted 22 percent in one day. But even after the time-out, stocks continued to fall, triggering another hour-long circuit breaker when the Dow dropped 555 points. With less than an hour left in the trading day, the market closed early. The Dow closed with a loss of 554.26 points, or 7.2 percent.

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quicklist: 4category: Largest Single-Day Loss: No. 7title: April 14, 2000url:text: Dropped 617.78 points

At the turn of the century, the technology sector was booming and the tech investment bubble was growing. But a warning from the Fed that inflation might rise faster than expected sent a sobering shock through the market, in effect bursting the tech-bubble and causing the Nasdaq, a technology-heavy stock index, to clock its worst day ever with 356 points, or 10 percent, lost. The day was only slightly better for the more diverse Dow Jones Industrial Index, which lost 618 points, or 5.7 percent.

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quicklist: 5category: Largest Single-Day Loss: No. 6title: Aug. 8, 2011 url: text: Dropped 634.76 points

Monday's market drop clocks in as the sixth worst in history. The Dow lost 634.76 points, or 5.6 percent, after S&P's announcement that the rating agency was downgrading the United State's perfect AAA credit rating to AA+. The downgrade sent shockwaves through stock markets around the world. U.S. investors watched $2.3 trillion in market values vanish in the six-hour trading day. S&P said it decided on the downgrade because the debt-ceiling plan did not go far enough to reduce the debt and the "political brinkmanship of recent months" showed that U.S. politics are "less stable, less effective and less predictable than what we previously believed."

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quicklist: 6category: Largest Single-Day Loss: No. 5title: Oct. 9, 2008url:text: Dropped 678.91 points

Exactly one year after the S&P 500 hit an all-time high, the Dow plunged 679 points, the fifth largest single-day drop in history. In the year between the 2007 high and the Oct. 9 drop, the S&P had fallen 42 percent. The steep one-day decline came after news that the auto sales were set to hit record lows for the year and continue to decline throughout 2009. That day General Motors stock fell 31 percent and Ford lost 21 percent.

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quicklist: 7category: Largest Single-Day Loss: No. 4title: Dec. 1, 2008 url:text: Dropped 679.95 points

After a year of profuse job loss, stagnant wages and declining production, the National Bureau of Economic Research officially declared that the United States was in a recession and was not expected to grow again for at least a year. The news caused stocks to fall around the world, a market reaction that was coupled by the bubbling Euro zone debt crisis involving Greece, Ireland, Spain and Italy. In New York, the Dow shed 679 points, or 7.7 percent.

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quicklist: 8category: Largest Single-Day Loss: No. 3title: Sept. 17, 2001 url:text: Dropped 684.81 points

The worst terrorist attack in U.S. history scarred the New York skyline and shook the New York Stock Exchange, which remained closed for a week after the attack. When the markets opened the following Monday. the Dow plummeted more than 7 percent, dropping 685 points. Airline stocks saw some of the steepest declines and the Dow Jones transportation average fell 343 points, or 12.8 percent.

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quicklist: 9category: Largest Single-Day Loss: No. 2title: Oct. 15, 2008 url:text: Dropped 733.08 points

The market did not react fondly when President George W. Bush announced that the U.S. government was going to partially take over the nine largest banks in America. In what amounted to the largest intervention into the banking sector since the Great Depression, Bush said injecting $250 billion of public money into banks was necessary to jump-start lending, which had become stagnant after the housing bubble burst. The day after Bush's announcement, the Dow shed 733 points, dropping nearly 8 percent, and earning the day the No. 9 spot in the top-10 largest percentage drops in stock market history and giving it the No. 2 worst point losses in the history of the Dow.

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quicklist: 10category: Largest Single-Day Loss: No. 1title: Sept. 29, 2008 url:text:Dropped 777.68 points

When home values started to slide to their worst prices since the Great Depression, the value of trillions of dollars worth of mortgage-backed securities plummeted, draining banks of their cash. As a result, banks were in dire straits. Lehman Brothers filing for bankruptcy and the Fed bailed out insurance giant AIG. But it was the failure of the House to pass a bank bailout bill that sparked panic in the stock exchange. By the time the markets closed, $1.2 trillion had vanished and the Dow had hemorrhaged 777.68 points, the most points ever lost in a single day of trading in the history of the New York Stock Exchange.

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