Stock Market Crash History: The Dow's 10 Biggest One-Day Percentage Losses

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The Dow Jones Industrial Average posted a 326-point (2.1%) plunge on Feb. 3, triggering a flood of stock market crash talk. 

January wasn't any better – led by another triple-digit fall (318 points, 3.5%) on Jan. 24, the Dow suffered its worst January since 2009 and its worst month since May 2012, deflating 5.3%. (The S&P 500 slid 3.6%, also its worst monthly performance since May 2012, and the Nasdaq dropped 1.7%, its worst since October 2012.)

Three factors are making market-watchers fearful of a full-blown stock market crash:

  1. The Dow climbed 27.36% in 2013.
  2. An official market correction – defined as a decline of 10% or more – hasn't happened since 2011.
  3. The VIX, Wall Street's volatility measure and "fear gauge," climbed 16.46% on Feb. 3 alone – and 56.27% between the New Year and that same day.

Note: Turn market volatility into profits by learning to trade the market's most powerful index. Here's how…

But 2014's one-day slips in the Dow are about half as big as the worst percentage drops in Dow history.

Here are the 10 largest one-day percentage plunges in Dow history.

What Triggered the Top 10 Single-Day Stock Market Crashes

The largest-ever percentage loss of 22.6% on Oct. 19, 1987, earned it the dark title "Black Monday."

Stock markets around the world came crashing down, beginning in Hong Kong, spreading its tendrils west to Europe, and finally finding U.S. markets. (Note that Australia and New Zealand call this day "Black Tuesday" because of the time zone difference.)

There are a few theories regarding the cause of Black Monday, but the most popular is program trading.

"Program trading" is a type of securities trading in which groups of 15 stocks or more are traded simultaneously based on preexisting factors via computer program. Investors use this method when they wish to trade a large number of stocks at the same time, or to take advantage of a window of price discrepancies between markets (arbitrage).

In the late 1980s, computer technology became more common, leading to a burst of program trading use on Wall Street. The public largely blamed program trading for blindly selling stocks as the market dropped, exacerbating the crash. Whether that was actually the case, or the sheer novelty of mass program trading caused a general distrust of it, is debatable. Some other theories on what caused Black Monday are overvaluation, illiquidity, and market psychology.

Oct. 26, 1987 – the Monday following Black Monday – marks the eighth biggest percentage drop. The value of all U.S. stocks fell $203 billion, an evaporation of wealth that, at the time, was only exceeded by the $503 billion drop a week earlier.

Traders noted further deterioration in market psychology. U.S. President Ronald Reagan began talks with congressional leaders to cut the federal budget deficit in hopes that such action would restore market confidence.

The second-largest daily percentage loss on the Dow is another "Black Monday," and it's followed by the third-largest drop on "Black Tuesday," on Oct. 28-29, 1929.

Join the conversation. Click here to jump to comments…

  1. H. Craig Bradley | February 22, 2014

    It appears we are always vulnerable to panics. The perceived causes always are different and hard to predict, except each "karma" consists of just the combination of factors that causes public confidence to decline. Mood gets negative and people ( everyone) become anxious, just like I sometimes feel when I read the news too often. Much news is not being widely reported. This is a cause for concern. Bullishness is so extreme that worrisome news is largely ignored.

    For example, what is going on with HSBC Bank in England? They are refusing to give depositors large amounts of cash (5,000 pounds) if a withdrawl is requested in person. Even here in the states, they always ask questions if they don't know you ( recognize you ). HSBC debit card holders lost access to their money for a few days last month (conversion to new platform). Furthermore, it was reported that HSBC has a capital deficiency of around 95 million pounds. ( They may require a bailout by the Crown ). HSBC can't meet Basil II capitalization requirements.

    US BANKERS can tell the public anything and who can prove its not true? Its their casino, not yours, after all. How about three investment bankers who have jumped out the window in recent weeks in London, Hong Kong, and in the U.S. Anybody read about that one? What's going on exactly? Another $ multibillion dollar bet gone bad?

  2. H. Craig Bradley | February 22, 2014

    JP Morgan Chase bankers jump.

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