October - The Unlucky Month For Stocks

Here are the highlights. Or should we say, lowlights?

1. October has traditionally been a bad month for stocks. Still, the Dow industrials' ($INDU:

9,325.01, +144.32, +1.6%) 14% drop over the past four weeks is the biggest October decline since 1987, when the Black Monday crash sent the blue-chip benchmark down 23% for the month. It had the most down days in a month since August 1973. During an eight-day losing streak at the beginning of the month, it racked up a total drop of 2,396 points. Read Market Snapshot.

'I don't know who was more disappointed with the month of October -- the oil bulls or Linus when the Great Pumpkin never showed up.'
— Phil Flynn, Alaron Trading

2. Massive daily moves in both directions sent traders reaching for the Mylanta. The S&P 500 ($SPX:

968.75, +14.66, +1.5%)has not had such a volatile month since November 1929, as measured by moves of at least 1% higher or lower. The Dow posted its two biggest point gains on record, climbing by 936 points on Oct. 13 and by 889 on Oct. 28. But it also posted its second-biggest point drop on record, of 733 points.

3. Shares of Germany's Volkswagen (DE:766400: news, chart, profile) set a new standard for huge price moves among non-penny stocks. The automaker's shares surged 348% on Monday and Tuesday, to 945 euros ($1,233), giving it a brief run as the largest company in the world by market capitalization, after investors scrambled to cover their short investments. By the end of the week, the stock had given back nearly half of those gains.

4. Panic that the world was heading into recession carved trillions in value from global stock markets, from Milan to Mumbai. Standard & Poor's global indexes lost $6.79 trillion all told, the most on record -- and easily topping September's $3.4 trillion. Read more on Global Markets.

5. The sell-off in commodities accelerated, pushing prices further from all-time highs reached earlier this year. Crude-oil futures on the New York Mercantile Exchange tumbled 33% during October, marking the biggest monthly percentage drop since trading began in 1983. And at the retail level, consumers could finally say they paid less at the pump than a year ago: Average retail prices fell 31% by the end of the month to $2.504 a gallon, or 14% lower than the same time last year, says AAA. Read Futures Movers.

"I don't know who was more disappointed with the month of October -- the oil bulls or Linus when the Great Pumpkin never showed up," said energy trader Phil Flynn, a vice president at Alaron Trading.

6. The dollar gets a lot of credit for the nosedives in energy and other commodities. The greenback gained an astonishing 14.3% against the euro from the close of September to the dollar's peak a few days ago. Those healthy gains, however, pale next to its advances of 22.3% against the Canadian dollar and 31.8% against the Australian dollar. Read more on currencies.

7. Any hope that fast-growing emerging markets could weather recession in the developed world evaporated as losses wiped out roughly $900 billion in wealth from the 25 major emerging markets. The MSCI Emerging Markets Index was on track for a nearly 30% fall, the worst monthly loss since August 1998, when Russia's debt default helped send the index down a similar amount. During the month, spreads on emerging-market bonds shot past 8 percentage points over Treasurys to a six-year closing high.

8. Regional indexes showed some whopping losses. Japan's Nikkei 225 (JP:1804610: news, chart, profile) hit a 26-year closing low in the last week of trading. Iceland's exchange tumbled 81% for the month. Argentina's Merval and Brazil's Bovespa indexes were set to make their biggest one-month percentage losses since August 1998, with the Merval falling 37% and the Bovespa losing 25%.

9. A rush to safe assets sent bond yields tumbling and prices rising. Yields on the 30-year U.S. Treasury bond ($TYX:

43.69, +0.85, +2.0%) hit their lowest level ever, 3.935%, on Oct. 6. And risk perception for corporate junk bonds hit the highest seen in five years on Oct. 28, according to S&P.

10. Inflation plays got shunted. Gold futures fell 18%, the biggest monthly percentage loss since 1983. Spreads on inflation-indexed bonds withered, with long-term inflation expectations falling to their lowest levels in at least five years. Read Metals Stocks.

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