The stock market today suffered the second-largest one-day loss in its history.

The Dow Jones Industrial Average dropped 36.33 points. It was the largest drop since Oct. 28, 1929 -- the date generally used to mark the start of the Great Depression of the 1930s -- when the Dow dropped 38.33 points.

The Dow industrial average fell to 995.13, the first time the market had fallen below the 1,000 mark in two weeks.

Last week it closed at 1,036.98, its highest point in nearly a decade.

Although the drop today was almost as large as the drop in 1929, the two numbers are not really comparable because the 1929 decline began from a much lower starting point. On a percentage basis, the 1929 drop was three times as large as the one today.

Deputy White House Press Secretary Larry Speakes, noting that Wall Street had been on a "steady incline upward since August," shrugged off the decline by saying the Dow "fluctuates from day to day."

Analysts attributed the market drop to the announcement Friday that the money supply had risen by $10 billion and the failure of the Federal Reserve Board last week to lower the discount rate.

"I think this is the first indication of the potential vulnerability of this market to any renewed tightening of monetary conditions that could send interest rates up," said Alan Schwartz, director of research at Bear, Stearns & Co.

Many market analysts had been expecting the industrial average to slip, retracing some of the 260-point, two-month gain that has led President Reagan to say that the market is demonstrating faith that the economy is moving close to recovery.

The bond markets also fell sharply, although trading was light. Several key Treasury bond rates fell, however, even though they picked up as much as a quarter point from Friday when the Fed did not cut its widely watched discount rate.

Most market analysts dismissed the possibility that the cuts in interest rates, which are the principal factor behind the boom in stock and bond prices, might soon be reversed.

"It would be tantamount to disaster if rates went up," said Shearson/American Express Vice President Charles Lewis. "Simply put, the market was looking for an excuse to go down, and the reason today was the Fed's not cutting the discount rate."

After the markets closed today, the Treasury Department reported that interest rates on its three-month and six-month treasury bills had risen for the third time this month.

Selling was the order of the day, and oil stocks were major victims of the pattern, particularly after word spread around Wall Street that Barton Biggs, Morgan Stanley & Co. Inc.'s managing director, had told colleagues today that he views oil stocks as only average performers over the next few years and that, as a result, the firm had sharply reduced the percentage of oil stocks in its portfolio.

Exxon, the most active New York Stock Exchange issue, fell by 1 5/8 to 29 7/8; Mobil dropped 1 1/8 to 25 1/4; Standard Oil of California dropped 2 1/2 to 32 1/4; and Phillips Petroleum was off 2 5/8, closing at 31 5/8. Among other major New York stocks, technology issues such as International Business Machines fell 2 5/8 to 80 1/8, and Tandy fell 3 3/8 to 40, while brokerage stocks were also sharply off, with Merrill Lynch down 3 7/8 at 49 1/2.

All told, only 196 stocks advanced while 1,586 fell and another 200 were unchanged. The New York composite index fell 3.03 points to 76.65. Volume was 83.7 million shares, down from 101 million.

The losses were just as dramatic on the American Stock Exchange, where the Amex index fell 10.18 points to 316.42, the fourth-largest setback ever for that measure. The average price per share fell by 41 cents as 553 American exchange stocks declined and 150 issues rose on volume of 6.8 million shares.

The NASDAQ's list of over-the-counter stocks also suffered deep losses, as 1,201 issues declined and 253 advanced.