The S&P 500 Index fell Thursday to its lowest point since 1997, wiping out a decade of gains. In 2008 the S&P 500 is down 49 percent, which would be its worst annual drop ever. The S&P 500 fell 6.7 percent and the Dow fell 5.6 percent. Combined with the drop Wednesday, it was the biggest two day drop since 1933. Twelve stocks fell for each that rose on the New York Stock Exchange. That's a wipeout day. The S&P 500's drop from an October 2007 record is 52 percent: that is the worst bear market since the Great Depression.
Treasury yields declined to record lows, with two-year note rates dropping below 1 percent for the first time, in a rush to safety. Contracts to protect against corporate default rose to an all-time high.
Life insurance stocks dropped for a fifth straight day on concerns that falling stock markets will lead to losses on retirement products. Lincoln National dropped 31 percent and MetLife, the largest life insurer, fell 13 percent. As a group, life insurers have lost two-thirds of their market value this year. The S&P 500 Financials Index, which includes insurers, banks and brokers, fell 11 percent to its lowest level since 1995.
The market briefly rose in the early afternoon after a report of a bipartisan plan to rescue the auto industry. Stocks started their steep late day drop after Congress told the auto industry to return in December with a detailed plan.
The S&P 500 index rose or fell at least 1 percent in 86 percent of October's trading days, making it the second-most volatile month in its 80-year history. Only November 1929 produced bigger swings.