Stock market sell off in perspective: Wall Street's five biggest weekly falls

Monday’s drop of 1,175 points was the Dow’s worst day ever, in points terms

Traders work on the floor of the New York Stock Exchange (AP Photo/Richard Drew)

Stock markets suffered big falls this week as a record period of calm came to a violent end. The FTSE 100 slid to a nine-month low while Asian and European markets all saw big losses.

Most notably, the Dow Jones Industrial Average, an index of 30 leading US shares, suffered two days of 1,000-point-plus declines.

Monday’s drop of 1,175 points was the Dow’s worst day ever (in points terms), far exceeding the index's previous record drop of 777, set on 29 September, 2008.

Clearly, the contexts are very different. In ‘08, Lehman Brothers had just collapsed and the global financial system was at serious risk of crumbling with it.

*data correct at 4:30pm on Friday in London

Now, there are fears that interest rates may rise and that some of the exuberance in equity markets over the past year or so may have been misplaced.

More than a quarter of the “Trump rally” that the US president has claimed sole responsibility for had been wiped out by Friday afternoon. Yet analysts largely agree that the fundamentals of the world economy remain strong and the prospects for growth this year are good.

While 1,000-point drops are eye-catching, they don’t mean a great deal. The Dow is still trading significantly above 20,000 point; an essentially meaningless milestone it passed through for the first time just over a year ago.

The fact that the index has reached such lofty heights means that, in percentage terms, big points losses are less damaging. As a percentage, shares have taken a battering, but the weekly losses for both the Dow and the much broader S&P 500 are far lower than the biggest five falls endured in the past 50 years.