Stocks Now 40 Percent Below Peak

This is what a real bear market looks like.

The Standard & Poor’s 500-stock index fell 8.8 percent today, its biggest one-day drop since 1987. But one-day drops can sometimes be erased the next day. The more relevant historical comparison looks back even further than the 1980s. Adjusted for inflation, stocks are now more than 40 percent below the highs they reached in 2000. (Share prices should be adjusted for inflation, just as any other price should.) That is the worst bear market since the 1970s, which was known as the “lost decade” for stocks.

To find another bear market worse than the current one, you have to go back to the Great Depression, when the index fell more than 80 percent from peak to trough, according to data compiled by Robert Shiller.

The S.&P. 500 still has not fallen back to its recent low. In late 2002, it briefly fell below 1,000, in inflation-adjusted terms, compared with 1,107 at today’s close. But it is getting close.