Thursday was a grim anniversary for US equities and it is becoming clear that Main Street has joined the professionals in running scared.

A year to the day after both the S&P 500 and the Dow Jones Industrial Average closed at record highs, a cascade of late selling swept through Wall Street.

The S&P’s plunge of 7.6 per cent extended its loss for the past year to 42 per cent. The Dow’s slide of 7.3 per cent on Thursday pushed the blue-chip barometer below 8,600, just three days after the 10,000 threshold was shattered. It was the largest one-day percentage fall in the Dow since the crash of 1987 – but such statistics are becoming wearily familiar for investors.

The big worry is that late-afternoon declines are becoming the norm. Aside from margin calls, this also shows that mutual funds are receiving redemption requests from investors who have dared to open their latest statements.

This ignores market wisdom that investing for the long haul means hanging tough when stocks turn sharply south.

But it is easy to understand why fear is coursing through Main Street.

A large cohort of the investing public are babyboomers, some of whom have already started retirement. The priority for these investors is the return “of” and not “on” capital. It does not help that housing, a prime source of wealth for many of them, shows no signs of stemming its already big slide in parts of the country.

US investors in recent years also invested heavily in foreign equities. Thanks to the rebound in the dollar and sharp falls in global markets, particularly in emerging economies, those fund statements look even worse.

With the full force of the freeze in credit yet to reach the economy, pending retirees are quite rightly doing the sums and deciding it is better to run than stick it out.