The Dow plunged into a bear market in just 20 days – the fastest 20% drop in history

Reuters

• It took just 20 trading days for the Dow Jones Industrial Average to enter bear market territory on Wednesday, easily making it the fastest such slide in the US stock market’s history.
• Past 20% declines from the index’s peak took 255 sessions on average, Michael Batnick, director of research at Ritholtz Wealth Management, wrote in a Monday blog post.
• The median length for all bearish drawdowns since 1915 is 156 days.
• The S&P 500 narrowly avoided closing in bear territory on Wednesday but is poised to join its peer index in Thursday’s session.
• Watch the Dow Jones Industrial Average update live here.

Wall Street shrugged off coronavirus concerns for weeks as the global outbreak intensified. Once investors woke up to its economic threat, violent sell-offs fueled the Dow’s fastest bear market plunge in history.

The Dow Jones Industrial Average slid 5.8% to close Wednesday’s session, bringing the benchmark index more than 20% from its February 12 peak. The decline marks the end of the historically long bull market and forces investors to absorb the first bear market since the financial crisis.

The Dow tumbled into bearish territory over just 20 trading days, far quicker than other declines of such caliber. Past 20% declines from the index’s peak took 255 days on average, with a median of 156 trading sessions, Michael Batnick, director of research at Ritholtz Wealth Management, wrote in a Monday blog post.

The second fastest bear slide took place in 1929, when the Great Crash contributed to a 36-session drop into a bear market.

Read more: JPMorgan has developed an AI tool to measure how the coronavirus is damaging markets — and its findings suggest the plunge is nowhere near finished

The S&P 500 narrowly avoided a bear-market close on Wednesday but is on pace to join the Dow in Thursday’s session as index futures tank in early trading.

The stock market’s weekslong stumble is primarily attributed to the escalating coronavirus and its threat to the global economy. Mass selling began on February 24 as virus outbreaks in South Korea, Italy, and Iran prompted fresh fears of a slowdown to global growth. Stocks entered correction territory on February 27 as investors fled risk assets through the week.

Monday marked the single biggest day of selling in the bearish decline. Stocks opened 7% lower after the weekend brought dire coronavirus news and saw the start of an oil-market war between Russia and Saudi Arabia. The extreme volatility prompted a 15-minute trading halt within minutes of the market’s open, the first such pause since 2008. By the end of the day, stocks sat nearly 8% lower and posted their biggest single-day decline since the financial crisis.

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