Of course it only fell 4.6% Monday, the largest percentage drop was nearly four times as large. Volatility is still extremely high, we shall see what today brings.
The Dow Jones industrial average fell by 1,175 points on the stock market today, plunging nearly 1,600 points at session lows. Those were the worst one-day and intraday point losses ever for the blue-chip index, something trumpeted across most financial media.
But in percentage terms — and that’s how you should look at it — the Dow had a very bad day, but hardly historic.
Because the Dow, S&P 500 index and Nasdaq composite have run up so much in the long bull market, comparing today’s point losses to earlier eras isn’t relevant. Percentage changes offer a better comparison.
The Dow’s 4.6% loss on Monday was the worst since August 2011. But it didn’t even crack the top-20 of all-time losses. It was just the 25th worst loss since 1960.
The Dow’s biggest one-day percentage loss was the 22.6% Black Monday crash on Oct. 19, 1987. In point terms, that was “only” 508 points. In second place, the Dow crashed 12.8% on Oct. 28, 1929. The blue-chip index retreated just 38 points that day.
Clearly, the market is struggling right now. The Dow industrials, S&P 500 and Nasdaq composite all plunged below their 50-day moving averages with hefty percentage losses. If they haven’t already done so, investors should consider taking at least partial profits in winners.