Four Years Ago Today: The Dow Loss of 7.87%

Today is the fourth anniversary of the Dow plunging 733.08. That was a loss of 7.87% which was the third-worst percentage loss of the past 80 years. The two that came ahead of that were both in 1987. This Friday will mark the 25th anniversary of the 1987 crash.

Interestingly, the point loss of October 15, 2008 was less than the 777.68 point loss from September 29, 2008, just 16 days before. Since the market had dropped so much between those two points, the latter, smaller drop was a larger percentage loss. Measuring from the close of October 15 to the close from this past Friday, the Dow is up by 55.4%.

The stock market is mostly flat today. I’m glad to see shares of JPMorgan Chase ($JPM) up a little today. Even though the bank reported good earnings and beat estimates as I expected, the market didn’t give the shares much of a boost on Friday.

Here’s a stunning fact: Bespoke reports that the S&P 500 has closed lower on the first day of trading each week for 12 of the past 14 weeks. That’s always been a Monday except for the Tuesday after Labor Day. I guess news over the weekend has usually been bad.

On the banking front, shares of Citigroup ($C) are up 3.2% today on a good earnings report. Profits actually fell to $1.06 per share but that was 10 cents ahead of expectations. I’m still pretty cautious on Citi. The previous two earnings reports were good but the Q4 report from last year was a disaster. Citigroup’s earnings were hurt by a $4.7 billion loss related to a joint venture brokerage business with Morgan Stanley ($MS).

The Commerce Department reported that retail sales rose by 1.1% last month. The number for August was revised upward to 1.2%. When we knock out sales for cars, gasoline and building materials, retail sales rose by 0.9% for September which beat expectations for 0.3% growth.

This is an important report because consumers drive the economy, and sluggish consumers have been responsible for sluggish economic growth this year. The trend of higher home prices seems to be translating into greater consumer spending.

Finally, Alvin Roth and Lloyd Shapley won this year’s Nobel Prize for Economics.

Posted by on October 15th, 2012 at 10:56 am


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