Worst One Day Percentage Losses: Where Does Today's Decline Rank?

Michael Seneodza over at "Trader Mike" provides some interesting perspectives on where today's percentage declines relate to past market declines.

"On days like today we always see headlines about how the day’s point losses rank for the financial indexes. But what is more important is where the moves rank on a percentage basis, because that’s the only way to do a comparison against history. A 778 decline in the DJIA today, while a record point loss, was only a 7% loss and doesn’t rank in the top 5 all-time but it is the 5th worst post 1940 or so. We’re certainly seeing historic moves right now. So here are some of the worst percentage days for the major financial indexes:

NASDAQ: Today was the third worst one-day decline for this index. Here are the 10 worst percentage losses for the Nasdaq:
1. October 19, 1987: -11.35%
2. April 14, 2000: -9.67%
3. September 29, 2008: -9.14%
4. October 26, 1987: -9.01%
5. October 20, 1987: -9.00%
6. August 31, 1998: -8.56%
7. April 3, 2000: -7.64%
8. January 2, 2001: -7.23%
9. October 27, 1997: -7.16%
10.December 20, 2000: -7.12%

S&P 500: It had its second worst day since 1950. (The data’s from Yahoo Finance and only goes back to 1950. The S&P 500 index was created in 1957, but it has been extrapolated back in time.) Here are the 10 worst one-day percentage losses for the S&P 500::
1. October 19, 1987: -20.47%
2. September 29, 2008: -8.79%
3. October 26, 1987: -8.28%
4. October 27, 1997: -6.87%
5. August 31, 1998: -6.80%
6. January 8, 1988: -6.77%
7. May 28, 1962: -6.68%
8. September 26, 1955: -6.62%
9. October 13, 1989: -6.12%
10.April 14, 2000: -5.83%

DJIA: I’m not sure where today’s drop ranks but it’s not in the top 5.
1. October 19, 1987: -22.61%
2. October 28, 1929: -12.82%
3. October 29, 1929: -11.73%
4. November 6, 1929: -9.92%
5. December 18, 1899: -8.72%

From the data I pulled from Yahoo Finance, which only goes back to 1928, today was the 17th worst day since 1928.. It was the fourth worst in modern times — which is probably a better measure given how different the world is now. Given all the circuit breakers put in post the 1987 and 1989 “market breaks,” it would be real difficult (if not impossible) to get another 22% down day. Here’s the modern top five worst DJIA days:

October 19, 1987: -22.61%
October 26, 1987: -8.04%
October 27, 1997: -7.18%
September 17, 2001: -7.13%
September 29, 2008: -6.98%"

Did you notice that there are a lot of September and October dates in that list! From a seasonal standpoint, many markets have a tendency to bottom in the October/November time period.