Dow disaster -- down nearly 700 points

Panic rules: The Dow Jones Industrial Average closes under 8,600.

Published October 9, 2008 7:29PM (EDT)


One year ago today, on Oct. 9, 2007, the Dow Jones Industrial Average closed at 14164.53.

On Oct. 9, 2008, the Dow closed under 8,600.

Roughly half of all American households are invested in the stock market, primarily through retirement funds. So the loss of almost 40 percent of the market's total capitalization -- as measured by the 30 stocks that make up the Dow -- is, in a very real sense, a tremendous loss of wealth for a vast swath of Americans.

But if you don't have a 401K or a slice of a mutual fund or a kid's college fund whose balance statements you are carefully ignoring, the outlook isn't much better. The Wall Street Journal's latest survey of economists predicts  that the U.S. economy will contract in the third and fourth quarters of 2008 and the first quarter of 2009.

If those predictions bear out, it would mark the first time U.S. GDP -- the total value of goods and services produced -- has contracted for three consecutive quarters in more than a half century.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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