Dow Has Suffered Four Biggest-Point Drops in Past Year

Sept. 29 marks the one-year anniversary of the biggest-point drop, 778, in the history of the Dow Jones industrial average, sparked by the initial failure of the House to pass the $700 billion financial rescue plan, CNNMoney.com reports.

That was followed by the Dow’s second-, fourth-, and fifth-largest point drops—as well as its largest, second-largest and third-largest point gains. And between the collapse of Lehman Brothers on Sept. 15 and the end of the year, the S&P 500 moved 3% or more in one day a total of 29 times.

While the market has continued to be volatile, the S&P 500 has made those 3% daily swings only 20 times so far this year.

“The lack of volatility is a sign of good behavior. This is what you should see at the start of a bull market,” said Todd Campbell, president of E.B. Capital Markets. “We’ve moved from a period of crisis to a period of early recovery.”

Alan Skrainka, chief market strategist with Edward Jones, concurred: “We don’t have the extreme volatility anymore because we’ve reached greater stability in the financial markets. Credit markets have mostly returned to normal. Many of the problems that were keys to the panic have been addressed, and it looks like the economy is coming out of the recession.”