Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



What It Takes to Push the Dow Down 300

As of 12:15 p.m. EST, the Dow Jones Industrials (INDEX: ^DJI  ) are down 308 points, as analysts pointed to the results of yesterday's U.S. elections as opening the door for more conflict on the fiscal cliff as well as worries about global macroeconomic pressures. With the temptation to call a 300-point drop a crash, I sought to find previous instances when the Dow had plunged 300 or more points.

There have been fewer than 60 trading sessions in which the Dow suffered at least a 300-point loss. The vast majority of those days were connected to the mortgage meltdown and financial crisis, as the U.S. economy fell into recession and the housing bust gradually worsened. The markets hit their choppiest patch starting in September 2008 with a 504-point drop after Lehman Brothers filed for bankruptcy, followed two days later by a 449-point plunge in the wake of the AIG (NYSE: AIG  ) bailout and a climactic 778-point crash when the House initially rejected what would eventually become the TARP bailout.

Even beyond that time frame, most crashes have come from events with broad macroeconomic implications. When Standard & Poor's downgraded the credit rating of the U.S., the Dow fell 635 points. From 2000 to 2002, there were several occasions on which the Dow posted big drops -- most notably a 685-point decline on the first day of trading after the September 11 attacks. The tech bust also contributed to major losses, as the untimely addition of Microsoft (Nasdaq: MSFT  ) and Intel (Nasdaq: INTC  ) to the Dow in late 1999 near the market's peak gave the average more tech exposure at exactly the wrong time. Prior to that, losses tied to financial crises in Asian currency markets in 1997 and in Russia in 1998 caused big drops, as did 1987's big crash and its 508-point plunge.

Stay alert
Whether today's election aftermath proves to be the beginning of a broader correction or a one-day blip remains to be seen. But with so many macroeconomic issues up in the air right now, it's not surprising to see the markets uneasy about the uncertain times we're living in.

Still, to survive tough times, it pays to stick with strong stocks. But what makes a stock strong? In the case of Intel, its position in PCs is dominant, but that market is maturing, and Intel finds itself in a precarious long-term situation longer term if it doesn't find new avenues for growth. Is Intel a buy despite those concerns? In our latest research report, our analyst runs through all of the key topics investors should understand about the chip giant. Better yet, you'll continue to receive updates as news develops for an entire year. Click here now to learn more.

Read/Post Comments (1) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 07, 2012, at 4:11 PM, spbimages wrote:

    Instead of looking at a 300 drop, how about looking at how many time the Dow went down 2.3%. That would make more sense.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2100047, ~/Articles/ArticleHandler.aspx, 10/25/2016 11:48:53 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,189.05 -33.98 -0.19%
S&P 500 2,146.11 -5.22 -0.24%
NASD 5,293.47 -16.36 -0.31%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 11:32 AM
AIG $60.50 Up +0.18 +0.29%
American Internati… CAPS Rating: ****
INTC $35.10 Down -0.16 -0.45%
Intel CAPS Rating: ****
MSFT $60.97 Down -0.04 -0.06%
Microsoft CAPS Rating: ****