S&P 500 · January 29, 2002

The January the books stopped being trusted

-2.86%

single-day change vs previous close

Part of a longer stretch

The dot-com bust hits the S&P 500

near the end of it · 2000-03-24 → 2002-10-09, -49.15% over the whole period

What happened that day?

29 January 2002 — the S&P 500 fell 2.86% to close at 1,100.64. No single cause can be pinned to the day
Two months earlier a large American energy company had collapsed when its dressed-up books came out. By January the suspicion was spreading to other large firms
Companies holding many businesses together drew the most suspicion, because a complicated structure also means more places to hide things
If the numbers cannot be trusted, nothing can be priced. So this decline came not from bad results but from results that could not be checked
The next two sessions took it back. The suspicion moved around company by company
From early January to 7 May the index fell 10.49% over this episode
That summer a law was written requiring executives to sign their financial statements personally

Sources

Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is put together from the public record; where a specific source was consulted it is listed above.