1. Ten Dramatic Drops in Dow Jones History
August 4, 2011 was no picnic for Wall Street. Approximately $2.3 trillion in
investors’ wealth was lost over a single day as the stock market suffered a nearly
513-point drop. Still, despite triggering an untold amount of stress for brokers and
investors, August 4th was no match for the turmoil of October 2008 or a host of
other Dow Jones freefalls. Here are ten of the market's worst days as measured by
point loss. August 4th is merely ninth on the list.
1. September 29th, 2008
In the autumn of 2008, Americans’ home values were plummeting. As the values
of mortgage-backed securities dwindled, bank vaults were quickly drained of cash.
Lehman Brothers, the nation’s fourth-largest investment firm, then filed for
bankruptcy and the insurance giant AIG sought a federal bailout. Many investors
feared a repeat of 1929’s Black Thursday or the 1987 crash. The proverbial straw
that broke the camel’s back came from the House: When it failed to pass a bailout
bill for the banks, panic took over. The Dow lost 777.68 points and September 29th
went down in history for having the greatest point loss in a single day of trading.
At the same time, Standard & Poor’s index of 500 stocks plunged nearly 9% in
value. It was the third-largest S&P decline since World War II.
2. October 15th, 2008
On October 14th, President George W. Bush declared a partial federal takeover of
America’s nine largest banks. The decision involved putting $250 billion of public
funds into the banking sector. While the decision was intended to jump-start the
economy, the Fed’s chairman Ben Bernanke expressed a less-than-positive outlook
and the market’s immediate reaction was one of fear. Reports of weak retail sales
contributed to concern. The Dow tumbled 733 points the following day. This
marked an almost 8% drop, making October 15th rank among the worst days not
only for point drops but also for percentage drops.
3. September 17th, 2001
Following the September 11 attacks on the World Trade Center in New York City,
the New York Stock Exchange was closed for a week. Upon reopening, trading
was remarkable orderly – a phenomenon attributed in part to the patriotism of
Americans urging one another to buy stocks. The NYSE was also given a hand
from the Federal Reserve, which cut interest rates, and by the Securities and

2. Exchange Commission, which relaxed the rules about companies buying back their
own shares. Nonetheless, the Dow plummeted 685 points, which represented
approximately 7 percentage points. A primary cause of the drop was a loss of
confidence in airline stocks, particularly for the aircraft manufacturer Boeing and
the aviation parts distributor United Technologies. Insurance company losses also
contributed to the point drop.
4. December 1st, 2008
December of 2008 opened with an official announcement that the United States
was in a recession. The National Bureau of Economic Research also predicted that
growth in manufacturing, whether domestic or abroad, would not resume for at
least a year. Oil prices tumbled in response. Meanwhile, a European debt crisis was
mounting as Greece, Ireland, Italy and Spain struggled with their national budgets.
The Dow responded with a loss of 679 points or 7.7%.
5. October 9th, 2008
In October of 2008, credit was scarce as banks deliberately hoarded cash.
Consumers were unable to secure loans and businesses found daily operations to
be difficult. On October 9th, reports of steep declines in auto sales led the Dow
Jones to plunge. With declines expected to continue, Ford’s stock fell 21% and
GM’s stock fell 31%. Meanwhile, Chevron and Exxon Mobil lost 12% each.
Altogether the Dow lost 679 points and 7.33 percentage points. The day was also
distinguished by an all-time high of 64 on the CBOE Volatility Index, a key
indicator of investors’ fear.
6. April 14th, 2000
At the start of the new millennium, Silicon Valley was floating high in a tech
bubble. However, trouble suddenly loomed on the horizon. On April 3, a federal
judge ruled in the United States v. Microsoft case that the computer giant was
guilty of deliberately monopolizing the personal computer market. Shortly
thereafter, the Fed warned of faster-than-expected inflation and raised interest
rates. Tech start-ups that had seemed promising were now exhausting their venture
capital without seeing signs of returns. Many investors responded by selling their
stocks in an effort to quickly cut their losses. NASDAQ, a tech-heavy stock index,
lost 356 points and the Dow fell by 618 points, a 5.66% loss.
7. October 27th, 1997

3. The US stock market took a nosedive on October 27th in response to losses in
Hong Kong and other Asian markets. In order to prevent extreme panic-driven
losses, the New York Stock Exchange briefly halted trading mid-day. Nonetheless,
the selling spree continued 30 minutes later when trading resumed. The NYSE
instituted another circuit breaker or trading curb and ultimately closed shortly
before regular trading hours were over. The day’s loss was 554.26 points or 7.18%.
8. October 22nd, 2008
October of 2008 claims three of the ten greatest point drops in NYSE history. After
major point losses on the 9th and the 15th, the investment world was already on
edge. Wachovia Bank then reported an even greater loss than had been expected
and weak profit forecasts were commonplace among US corporations. The October
22 sell-off was sparked by fears of a worldwide recession. The Dow shed another
514 points, which represented 5.69% of its total value.
9. August 4th, 2011
On August 4th the United States was grappling with dual fears. First, a domestic
double-dip recession appeared imminent in light of high unemployment numbers
and falling home prices. Second, concern was mounting over Italy and Spain’s
national debts. The Dow slid 612.76 points, or 4.31%, as investors engaged in the
largest sell-off since the recession began in 2008.
10. August 31st, 1998
The 513 point drop of August 31 erased gains that had been made steadily since
late 1997. US investors engaged in a massive sell-off, partly in response to a
market free-fall in Russia that followed the Duma’s call for Boris Yeltsin’s
resignation. The Russian crisis essentially bulldozed markets in Brazil and
throughout Latin America, adding to US investors’ concerns over market volatility.
The Dow shrank by 6.37%.