Markets Plunge After S&P Downgrade

As expected, the markets were destroyed today after Standard and Poor's announced a downgrade of America's credit rating after the closing bell on Friday.

There were a number of headfakes throughout the day (the DJIA rallied a couple of hundred points during the last hour of trading, only to tank to new daily lows during the last few minutes), but the final damage ended up looking like this:

DJIA, -634.76, -5.55%
NASDAQ, -174.72, -6.90%
S+P 500, -79.92, -6.66%

An awful, awful day for the markets. The three averages listed above have basically gone straight down since the debt ceiling deal was announced last week.

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So how bad was today from a historical perspective? Let's take a look:

For the DJIA, today was the sixth worst day in the history of the average in terms of total point loss:

1. 2008-09-29 -777.68 points
2. 2008-10-15 -733.08 points
3. 2001-09-17 -684.81 points
4. 2008-12-01 -679.95 points
5. 2008-10-09 -678.91 points
6. 2011-08-08 -634.76 points

In terms of total % loss, today wasn't even in the top ten (the worst day ever was 1987-10-19 when the DJIA dropped a whopping 22.61%).

For the NASDAQ, today wasn't in the top ten in terms of point loss (April 14th, 2000 holds the record with a drop of 355.49 points) or percentage loss (October 19th, 1987, -11.35%).

For the S&P 500, today was the 5th largest point drop in the history of the index:

1. 2008-09-29 -106.85 points
2. 2008-10-15 -90.17 points
3. 2000-04-14 -83.95 points
4. 2008-12-01 -80.03 points
5. 2011-08-08 -79.92 points

In terms of total percentage loss, today was just outside of the top 10:

1. 1987-10-19 -20.47%
2. 2008-10-15 -9.03%
3. 2008-12-01 -8.93%
4. 2008-09-29 -8.81%
5. 1987-10-26 -8.28%
6. 2008-10-09 -7.62%
7. 1997-10-27 -6.87%
8. 1998-08-31 -6.80%
9. 1988-01-08 -6.77%
10. 2008-11-20 -6.71%

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It's going to be interesting to see how the markets react tomorrow. After all, Wall Street's horrible performance today will be all over the nightly news and on the front of the morning papers tomorrow. Many people that I talk to seem to be of the "sell now, ask questions later" mindset..

Source: Dow Jones Historical Data

S&P 500 Historical Data

Nasdaq Historical Data


Filed under: The Economic Meltdown



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