Updated on August 24 at 4:15 p.m. ET
U.S. stocks had a roller-coaster day Monday, with the Dow falling more than 1,000 points at the opening bell before recovering at noon when it was 150 points down, and then fading again in the afternoon to close down 585 points, or about 3.4 percent.
The broader S&P 500, which also had partially recovered in the afternoon, closed in correction. It was 3.9 percent down at 4 p.m.—11 percent below the record it set in May. The Nasdaq Composite fell 3.8 percent.
Although the declines were large, they were by no means even close to the largest percentage decline in Wall Street history. On October 19, 1987—now famous as Black Monday—the Dow fell more than 22 percent.
At the heart of Monday’s massive selloff was growing unease about the state of China’s economy. Markets were hammered in Europe and Asia. In China, the benchmark Shanghai composite index erased its gains for the year.
Ryan Larson, head of U.S. equity trading for RBC Global Asset Management, attributed the selloff to “herd mentality.”
“But once that herd gets out of the way, there can be some very good buying opportunities,” he told The Wall Street Journal.
Larson told the newspaper the Dow’s relative recovery—it cut its earlier losses by nearly half—showed investors that the initial drop was an overreaction.