On a terrible day, the S&P 500 enters new bear territory

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How bad was it today on Wall Street? Very bad -- setting a dangerous scene for Tuesday morning:

--- Falling stocks outnumbered winners by more than 18 to 1 on the New York Stock Exchange, with 3,065 down and just 164 up. Trading volume was huge.

--- The drop in the Dow Jones industrials was 504.48 points, or 4.4%, to 10,917.51. That was the worst percentage decline since July 19, 2002, when the index fell 4.6% amid the sell-off tied to the accounting scandals of that era (WorldCom etc.).

In point terms the Dow’s loss was the largest since it fell 684.81 points, or 7.1%, to 8,920.70 on Sept. 17, 2001, the day trading reopened after the terrorist attacks.

--- Other major indexes also had their worst days since Sept. 17, 2001. The broad Dow Jones Wilshire 5,000 tumbled 578.30 points, or 4.5%, to 12,186.58. It had dropped 5.1% on the Monday after the terrorist attacks.

--- The Standard & Poor’s 500 entered a new phase of the current bear market by falling through the previous 2008 closing low reached in July. The S&P sank 59 points, or 4.7%, to finish at 1,192.70. The previous low was 1,214.91 on July 15.

The index now is down 23.8% from its record high of 1,565.15 last October. This still is a mild bear market compared with the last one: The 2000-02 bear saw the S&P 500 fall nearly 50%. The average peak-to-trough bear decline since 1929 is 29.4%, according to the Stock Trader’s Almanac.

That’s the problem with bear markets, though: There almost never is an ‘average’ one.

--- If there’s a bright spot today, it’s smaller stocks -- which have been surprisingly resilient all year. The Russell 2,000 small-stock index fell 4.2%, which was less than what the S&P 500 or the Dow gave up. The index is down 10% year to date, compared with the 17.7% drop in the Dow this year.

But in this environment, it’s tempting fate to point to a market sector that’s holding up better than the rest.