The Dow Suffered Its Third-Worst Point Drop Ever. Don't Panic.

Al Root Barron's Take Markets Asia Pacific Asia BRICS Countries China Greater China Emerging Market Countries Developing Economies Eastern Asia Political/General News Respiratory Tract Diseases Health Medical Conditions Outbreaks/Epidemics SARS/MERS Viruses Infectious Diseases Commodity/Financial Market News Content Types Factiva Filters C&E Exclusion Filter N/DJN N/GEN N/HLT N/MKT N/WER R/ASI R/CH R/FE R/FEO Barrons.com Barrons Blogs Wires COMP DJIA Dow Jones Industrial Average FTSE 100 Hang Seng Index HK:HSI Nasdaq Composite S&P 500 SPX UK:UKX CODES_REVIEWED Companies Markets Barron's Take author Al Root author|Al Root topicid 8578 name Al Root extractedtext Al Root rank 1 codetype author code al_root nameformat surname_first author Al Root id Al Root barrons_display_brand BARTAKE barrons_display_brand|BARTAKE codetype BARRONS_DISPLAY_BRAND canbedisplaybrand true value BARTAKE source MANUAL status modified name Barron's Take code BARTAKE barrons_display_subject BARMKTS barrons_display_subject|BARMKTS codetype BARRONS_DISPLAY_SUBJECT canbedisplaysubject true value BARMKTS source MANUAL status modified name Markets code BARMKTS djn N/MKT djn|N/MKT significance prominent name N/MKT why about source FACTIVA fcode N/MKT codetype djn code n_mkt onlinesignificance prominent djn N/GEN djn|N/GEN name N/GEN why lineage source FACTIVA fcode N/GEN codetype djn code n_gen djn N/HLT djn|N/HLT name N/HLT why lineage source FACTIVA fcode N/HLT codetype djn code n_hlt djn R/CH djn|R/CH significance prominent name R/CH why about source FACTIVA fcode R/CH codetype djn code r_ch onlinesignificance prominent djn R/ASI djn|R/ASI name R/ASI why lineage source FACTIVA fcode R/ASI codetype djn code r_asi djn R/FE djn|R/FE name R/FE why lineage source FACTIVA fcode R/FE codetype djn code r_fe djn R/FEO djn|R/FEO name R/FEO why lineage source FACTIVA fcode R/FEO codetype djn code r_feo djn N/DJN djn|N/DJN codetype djn value N/DJN source DJN-CONTROL status modified inactivebydefault true name N/DJN code n_djn djn N/WER djn|N/WER codetype djn value N/WER source DJN-CONTROL status modified inactivebydefault true name N/WER code n_wer first_publish_headline The Dow Suffered Its Third-Worst Point Drop Ever. Don’t Panic. first_publish_headline|The Dow Suffered Its Third-Worst Point Drop Ever. Don’t Panic. flow NWREGULAR flow|NWREGULAR codetype FLOW value NWREGULAR source MANUAL status modified name Wires code NWREGULAR flow Barrons.com flow|Barrons.com codetype FLOW value Barrons.com source MANUAL status modified name Barrons.com code online name Online title Product code Barrons.com flow Barrons Blogs flow|Barrons Blogs codetype FLOW value Barrons Blogs title Product source MANUAL status modified name Barrons Blogs code Barrons_Blogs headline The Dow Suffered Its Third-Worst Point Drop Ever. Don’t Panic. headline|The Dow Suffered Its Third-Worst Point Drop Ever. Don’t Panic. index Dow Jones Industrial Average index|Dow Jones Industrial Average symbol DJIA country US codetype index displayname Dow Jones Industrial Average extractedtext Dow Jones Industrial Average source MANUAL code djia name Dow Jones Industrial Average significance prominent exchange Dow Jones Global exchangeisocode DOW JONES GLOBAL chartingsymbol INDEX/US/DOW JONES GLOBAL/DJIA status modified onlinesignificance prominent index Hang Seng Index index|Hang Seng Index symbol HK:HSI country HK codetype index displayname Hang Seng Index extractedtext Hang Seng Index source MANUAL code hk_hsi name Hang Seng Index significance prominent exchange Hong Kong Exchange exchangeisocode XHKG chartingsymbol INDEX/HK/XHKG/HSI status modified onlinesignificance prominent index FTSE 100 index|FTSE 100 symbol UK:UKX country UK codetype index displayname FTSE 100 Index extractedtext FTSE 100 source MANUAL code uk_ukx name FTSE 100 significance prominent exchange FTSE UK exchangeisocode FTSE UK chartingsymbol INDEX/UK/FTSE UK/UKX status modified onlinesignificance prominent index S&P 500 index|S&P 500 symbol SPX country US codetype index displayname S&P 500 Index extractedtext S&P 500 source MANUAL code spx name S&P 500 significance prominent exchange S&P US exchangeisocode S&P US chartingsymbol INDEX/US/S&P US/SPX status modified onlinesignificance prominent index Nasdaq Composite index|Nasdaq Composite symbol COMP country US codetype index displayname NASDAQ Composite Index extractedtext Nasdaq Composite source MANUAL code comp name Nasdaq Composite significance prominent exchange U.S.: Nasdaq exchangeisocode XNAS chartingsymbol INDEX/US/XNAS/COMP status modified onlinesignificance prominent index DJIA index|DJIA name Dow Jones Industrial Average background-info BRIEFING-BOOK significance PROMINENT index UK:UKX index|UK:UKX name FTSE 100 Index background-info BRIEFING-BOOK significance PROMINENT index HK:HSI index|HK:HSI name Hang Seng Index background-info BRIEFING-BOOK significance PROMINENT index SPX index|SPX name S&P 500 background-info BRIEFING-BOOK significance PROMINENT index COMP index|COMP name Nasdaq Composite background-info BRIEFING-BOOK significance PROMINENT inset inset-1 inset|inset-1 responsive layout inline inset inset-2 inset|inset-2 responsive layout inline media media-2 media|media-2 responsive layout wrap softcrop Custom_6121x4081 imphotoid im-123873 location https://images.barrons.com/im-123873/?size=custom_6121x4081 media media-1 media|media-1 softcrop Custom_6121x4081 imphotoid im-123873 location https://images.barrons.com/im-123873/?size=custom_6121x4081 ns mcat ns|mcat significance prominent name Commodity/Financial Market News why about source FACTIVA fcode mcat codetype ns code mcat onlinesignificance prominent ns gout ns|gout significance prominent name Outbreaks/Epidemics why about source FACTIVA fcode gout codetype ns code gout onlinesignificance prominent ns gsars ns|gsars significance prominent name SARS/MERS Viruses why about source FACTIVA fcode gsars codetype ns code gsars onlinesignificance prominent ns gcat ns|gcat name Political/General News why lineage source FACTIVA fcode gcat codetype ns code gcat ns gcold ns|gcold name Respiratory Tract Diseases why lineage source FACTIVA fcode gcold codetype ns code gcold ns ghea ns|ghea name Health why lineage source FACTIVA fcode ghea codetype ns code ghea ns gmed ns|gmed name Medical Conditions why lineage source FACTIVA fcode gmed codetype ns code gmed ns gspox ns|gspox name Infectious Diseases why lineage source FACTIVA fcode gspox codetype ns code gspox ns ncat ns|ncat name Content Types why lineage source FACTIVA internalsymbol true fcode ncat codetype ns code ncat ns nfact ns|nfact name Factiva Filters why lineage source FACTIVA internalsymbol true fcode nfact codetype ns code nfact ns nfce ns|nfce name C&E Exclusion Filter why lineage source FACTIVA internalsymbol true fcode nfce codetype ns code nfce nwchain SB506573376569705133806045862234602899485941 nwchain|SB506573376569705133806045862234602899485941 re china re|china significance prominent name China why about source FACTIVA subcat cntry fcode china codetype re code china onlinesignificance prominent re apacz re|apacz name Asia Pacific why lineage source FACTIVA subcat snr fcode apacz codetype re code apacz re asiaz re|asiaz name Asia why lineage source FACTIVA subcat snr fcode asiaz codetype re code asiaz re bric re|bric name BRICS Countries why lineage source FACTIVA subcat eco fcode bric codetype re code bric re chinaz re|chinaz name Greater China why lineage source FACTIVA subcat sc fcode chinaz codetype re code chinaz re devgcoz re|devgcoz name Emerging Market Countries why lineage source FACTIVA subcat eco fcode devgcoz codetype re code devgcoz re dvpcoz re|dvpcoz name Developing Economies why lineage source FACTIVA subcat eco fcode dvpcoz codetype re code dvpcoz re easiaz re|easiaz name Eastern Asia why lineage source FACTIVA subcat sc fcode easiaz codetype re code easiaz relay SYND relay|SYND name Syndication source EXPANDER value SYND codetype RELAY code synd status modified statistic CODES_REVIEWED statistic|CODES_REVIEWED name CODES_REVIEWED value CODES_REVIEWED codetype STATISTIC code CODES_REVIEWED subject OAMK subject|OAMK description 04|Markets|Asia Mkts News source EXPANDER value OAMK codetype SUBJECT code oamk subject BARCOMP subject|BARCOMP ruleid BARCOMP codetype SUBJECT value BARCOMP canbedisplaysubject true name Companies title Companies status modified code BARCOMP subject BARMKTS subject|BARMKTS ruleid BARMKTS codetype SUBJECT value BARMKTS selectable true canbedisplaysubject true name Markets title Markets status modified code BARMKTS subject BARTAKE subject|BARTAKE ruleid BARTAKE codetype SUBJECT value BARTAKE canbedisplaybrand true name Barron's Take title Barron's Take status modified code BARTAKE wordcount 565 wordcount|565 id facebook id|facebook news_tab_url https://www.barrons.com/articles/dow-jones-industrial-avearge-had-its-third-worst-point-drop-ever-dont-panic-51582584326 Photo by Spencer Platt/Getty Images The Dow Suffered Its Third-Worst Point Drop Ever. Don’t Panic. The Dow Suffered Its Third-Worst Point Drop Ever. Don’t Panic. Dow Jones Industrial Avearge Had Its Third-Worst Point Drop Ever. Don’t Panic.

The Dow Jones Industrial Average dropped by more than 1,000 points for just the third time in its long history. The percentage drop, while painful, is less distressing.

The Dow Suffered Its Third-Worst Point Drop Ever. Don’t Panic.

The Dow Jones Industrial Average dropped by more than 1,000 points for just the third time in its long history. The percentage drop, while painful, is less distressing.

https://www.barrons.com/articles/how-to-spot-a-real-market-panic-51565374594 https://www.barrons.com/articles/coronavirus-is-cratering-the-stock-market-why-it-can-still-get-worse-51582568936 https://www.barrons.com/articles/the-dow-is-down-700-points-as-the-coronavirus-spreads-in-europe-51582548023 https://asset.barrons.com/dynamic-insets/charts/cdc_e8871efb4a1a644e8ac54bc0.json https://www.barrons.com/articles/black-monday-explaining-the-crash-30-years-later-1508359834 https://asset.barrons.com/dynamic-insets/charts/cdc_64c1a75b22c7150aca58a5e0.json https://www.barrons.com/articles/dow-jones-industrial-average-set-to-drop-800-points-what-history-says-happens-next-51582553267 https://www.barrons.com/articles/gilead-stock-surges-after-world-health-organization-official-calls-for-focus-on-coronavirus-drug-51582568712 mailto:allen.root@dowjones.com The Dow Suffered Its Third-Worst Point Drop Ever. Don’t Panic. By Al Root Photo by Spencer Platt/Getty Images Dow Jones Industrial Average dropped by more than 1,000 points on Monday.

The Dow Jones Industrial Average dropped by more than 1,000 points for just the third time in its long history. Investors shouldn’t care about the points though. The percentage drop, while painful, shows this is far from a market panic.

Monday, of course, was a bad day for U.S. investors. There is no ducking that fact. The spread of the coronavirus outside of China spooked all investors.

Europe’s FTSE 100 Index dropped 3.3%. Hong Kong’s Hang Seng Index fell 1.8%. The Dow dropped 3.6%. The S&P 500 fell 3.4%. And the Nasdaq Composite dropped 3.7%.

The Dow’s 1,032 point decline was the third-largest point drop ever. That sounds ominous, but it isn’t all that bad, historically speaking.

https://asset.barrons.com/dynamic-insets/charts/cdc_e8871efb4a1a644e8ac54bc0.json

The prior two 1,000-plus point declines occurred in the same month: February 2018. If fact, half of all the top-10 point declines occurred in 2018. That was a bad year for the Dow, but it wasn’t a disaster. The index’s 30 component stocks lost investors about 4% that year. The large daily declines experienced early in 2018, however, didn’t end up derailing the long-running U.S. bull market.

The Dow dropped by a little more than 4% in February 2018. That large monthly decline still left the Dow up year-to-date entering March.

That’s the good news. There is bad news too. Monday’s 3.6% decline is in the worst 1% in the 30,000-or-so-days history of the Dow. It’s a bad day and caused a lot of pain for a lot of investors.

Still, Monday doesn’t come anywhere close to the top-10 largest percentage declines. A drop of more than 8% is required to make that list.

Eight of the top-10 largest percentage declines occurred before the end of 1932. The only modern trading sessions to crack the top 10 were around Black Monday—Oct. 19, 1987. The Dow fell an incredible 22.6% on Black Monday. The index also declined 8% a week later, on Oct. 26.

https://asset.barrons.com/dynamic-insets/charts/cdc_64c1a75b22c7150aca58a5e0.json

Point drops make headlines, but percentage drops are what investors focus on. Looking ahead, the ability to contain and control the spread of the virus will determine the near-term direction of the Dow.

First- and second-quarter economic activity will likely be impacted by the virus. China, the world’s second-largest economy, isn’t close to running at 100%. That will hurt corporate earnings world-wide. But economic activity should bounce back, as long as the virus spread can be controlled.

Containment isn’t a forecast. It’s a hope. And that’s what all investors, and health-care professionals, would like to see.

Write to Al Root at allen.root@dowjones.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.