Biggest Stock Gains in History
On Oct. 14, 2008, the stock market had its single biggest rally since the Great Depression, tallying a 936-point gain on the Dow Industrial Market. It ended the day at 9,387.61. While that may sound impressive, the market was down almost 500 points from its peak of 14,165 points about a year earlier. The spike came after an eight-day losing streak in which the market dove 2,400 points, losing about 22 percent of its value. Following are some other interesting facts about the biggest stock gains in U.S. history.
Record increases in the market historically occur more often in bear markets, when the market is down, than in bull markets, especially when gains are recorded in percentages rather than in dollars and cents. For example, if the market is down, a 10 percent increase might sound like a large jump, but in dollar amounts, it is smaller than a 10 percent increase in a bull market in which the prices are at higher levels.
Five of the seven biggest point gains in the history of the market came in the bear market of 2000-2002. The only two in the top five that occurred outside that time frame are the 936-point jump in October 2008 and a 417-point game that came on March 13, 2008. • On March 16, 2000, the market rose 499 points, up 4.9 percent. • On July 24, 2002, stocks rocketed 489 points, a gain of 6.4 percent. • On July 29, 2002, the market saw a 447 point run-up, a 5.4 percent gain. • On April 5, 2001, a market rise of 403 points netted a 4.2 percent gain. • On April 18, 2001, a 399-point gain pushed the market up 3.9 percent.
On June 1, 2009, the market experienced the largest three-month gain in history, when the World Stock Market Index increased by 8.62 percent in May, gained 10.91 percent in April and and posted a 7.24 percent gain in March. The cumulative compounded gain of 29 percent in the World Stock Market Index is the largest gain over a tree-month period in the history of the index, dating to 1970. The problem with relying on three-month average gains is that it allows manipulation of numbers in that you can pick the peaks and valleys along the way.
A bear market rally, where historic spikes are most frequently seen, are usually temporary increases in a longer-term down market. It's a function of the Gaussian, or bell, curve, wherein the majority of trades fall within the so-called "normal" range. Usually, a few traders get the ball rolling and others follow. If buyers begin buying stocks, driving up the price, others jump on board before the price gets too high. Within a day or two, trading subsides to normal levels as sell-off occurs.
Not surprisingly, Google leads the pack with a 20 percent jump in price on April 18, 2008. Google's stock closed at $539.41 per share, up $89.87 from the previous day after the company reported that its first-quarter earnings were far beyond experts' expectations.