By Barry Eitel
The Dow Jones Industrial Average tanked over 1,000 points on Thursday, closing the day down 4.15 percent to 23,860.46 points.
In total, the index lost 1,032.89 points from a day before. In terms of just points, it was the second-worst day ever for the Dow, just trailing Monday, when it plunged 1,178.20 points. The previous record for daily point losses in the Dow’s 120-year history was set on September 29, 2008 at the start of the global financial crisis, when the Dow fell 777.68 points.
The Dow closed below 24,000 points for the first time since November of last year, when investors were particularly excited about the passage of the bill overhauling the tax code in the United States. After the bill was passed, the Dow raced to record highs, hitting 26,616.71 on Jan. 26.
Less than two weeks later, though, the market has wiped out 10 percent of its value during its surge upward and is now in correction territory.
The downward turn was sparked by a report from the Labor Department saying that unemployment is historically low and wages are high, causing analysts to worry about inflation. Investors are also worried that the Federal Reserve will increase interest rates.
While the Dow hit new highs month after month in 2017, President Donald Trump used it to validate his presidency. Since the Dow dropped, though, he has not tweeted about it. Like on Monday, the White House appeared unworried about the plunge.
“The President, like the rest of the White House, is concerned about long-term economic indicators and factors,” White House deputy press secretary Raj Shah told reporters. “And the fundamentals, in terms of the long term, are very strong. Again, unemployment and the labor market are very strong. Unemployment is at 4.1 percent. We saw wages rise on Friday for the first time — not for the first time, but at a measurable level, for the first time in nearly eight years, or nine years. And corporate earnings are high. And we believe that these long-term fundamentals demonstrate a healthy economy.”
While the drops in terms of points this week have been historic, measured by percentage, the “Black Monday” crash of 1987 was much worse; the Dow dropped 22.61 percent on that day.