December 1, 2008
Losses in the NASDAQ and the S&P500 reached near minus nine percent at the close, making this the second deepest cut in the indices since 1950. While the DJIAs fall was slightly smaller, nevertheless, its -7.7 percent drop today ranks as its third worst performance.
It was just 29 days ago that the market suffered similar, near record losses. Since that beating, prices advanced significantly, although in a seesaw pattern that included sharp losses. Yet today saw these gains wiped out, as the indices fell, not only below their recent high of November 4, but also beneath their closes on the earlier near record loss of October 15.
The worst day, in October 1987, marked a sharp but brief tumble, and, as described in the October 15, 2008 analysis, the market continued to substantially higher grounds. It is not obvious whether these recent deep reactions are a prelude to a similar upturn, or to further declines. Nevertheless, looking at the following day, prices recovered in the five percent range for the indices, not only last October but also in 1987.
DJIA -7.70 percent
NASDAQ -8.95 percent
S&P500 -8.93 percent