12 Wall Street Biggest Crashes
Wall Street, the bastion of the world’s economic status in New York, has this instantly recognizable massive bronze bull outside it. This symbolizes the potency of the institution and the spirit of the free world’s greatest market.
It naturally also encapsulates everything that a bull market represents – strength, virility and an indomitable reaching forwards to better and greater things. Aside from being a tourist attraction, the statue has been known to be shunned by visitors during downturns.
Black Monday
This event of October 1987 is when stock markets worldwide crashed. It was only felt in the US after other markets had been subject to large declines.
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The Black Monday (also known as Black Tuesday because of time differences) crash was, and has held the distinction since, of being the largest one-day percentage decline in the DJIA.
Dot Com bubble
This was the collapse of a technology bubble on March 10, 2000. The Nasdaq Composite stock market index, which held numerous Internet-based businesses, peaked in value on March 10, 2000, before crashing. This was the end of excessive speculation, mainly in the US, roughly from 1995 to 2000, highlighting extreme growth in the use of the Internet.
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The bubble was caused by the massive upswing in the number of Internet-based companies, with investors weighing in heavily without cautioning as to whether such companies could turn a profit. It was almost like a mass hysteria movement which, without a solid foundation, had to collapse. Investors were terrified of not being able to cash in on the swing and abandoned all reason to the wind. Lesson learned.
Downturn of 2002
This event was a downturn in stock prices during 2002 and was felt not only on the NYSE but also in Canada, Asia, and Europe. After recovering from the lows reached following the 9/11 attacks, indices started to slide in March 2002 with sharp declines in July and September, reaching lows last seen in 1997 and 1988.
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An explosion of accounting scandals – Arthur Anderson, Adelphia, Enron and WorldCom – also contributed to the speed of the downturn as many corporations were forced to restate earnings, some leading to negative outcomes, leading to the loss of investor confidence.
US bear market 2007-2009
This 17-month bear market occurred during the financial crisis of 2007-2009. The S&P 500 lost almost 50% of its value but there were strong interventions by governments and central banks to cushion the NYSE.
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There was continuing debate as to the cause of the bear market. The Republicans and Democrats were strongly divided, and there emerged three camps – those that blamed the economy, those that blamed the Bush administration and others that wanted to shove the blame onto the arriving newbies, the Obama administration.
