Stayin' Alive: Dow just misses '78 losing streak
Not since the Bee Gees and their "Saturday Night Fever" soundtrack dominated the radio has the Dow Jones industrial average endured a longer losing streak.
The Dow blipped up 30 points Wednesday, ending a string of down days at eight. Until the last few minutes of trading, it looked as if stocks might match a nine-day losing streak that ended on Feb. 22, 1978.
Weighing on stocks 33 years ago: A stalemate in Congress. A weakening economy. Fears about the global financial system.
"The market was troubled; the economy was troubled," says Jeffrey Hirsch, editor in chief of The Stock Traders' Almanac. And President Jimmy Carter was wrestling with Congress, something the current occupant of the White House might identify with.
Yet big differences distinguish the two periods, too. The February 1978 losses came at a time of high inflation and high interest rates. The rate that banks charge each other for overnight loans was around 6.8 percent.
These days, that benchmark — the Fed funds rate — is a nearly invisible 0.16 percent.
In February 1978, investors were worried about a coal strike by the United Mine Workers. The strike, a symbol of labor's clout at the time, lasted 110 days. And the Dow's losing streak came toward the end of the 1976-1978 bear market in stocks.
By contrast, the current string of losses follows a strong rally.
The last time the Dow fell eight days in a row was in October 2008. That was the height of the financial crisis, after the collapse of Lehman Brothers. Stocks would continue to tumble until bottoming in March 2009.
The worst streak ever? Fourteen straight days of losses from July 29 to Aug. 13, 1941. That was four months before the United States entered World War II.