The stock market can be a volatile game. We hear, regularly, about the unstable nature of stocks and stock markets, but what few people realize is that most of the time the stock market remains fairly stable. That, simply put, is why crashes of stock markets are considered big news. There have been several notable stock market crashes, but each has had a specific reason associated with the crash.
On October 29, 1929, now known as Black Tuesday, is one of the worst and earliest recorded stock market crashes. The New York Stock Exchange became artificial, over-inflated. People borrowed money from lenders to buy high-priced stocks in an attempt to sell them for a profit, repay the lenders and keep the difference. The stocks, however, fell sharply, sent people into a tailspin which crashed the market. It is consider the official start of the Great Depression.
On October 16, 1987 the market once again took a turn for the worse. News of a major, U.S., trade deficit broke on the 14th of that money and led to a massive selling of stocks which caused the market to crash. It lost over 100 points in October 16th and an additional 400 points on October 19th. The NYSE lost 22% of its value due to the news.
Following the attacks of September 11th, 2001 the global stock market took a nose dive that is considered one of the worst stock crashes in history. The attacks greatly affected global stocks, disrupted the U.S. dollar and caused significant rises in oil prices. The changes in the market led investors to head for saver commodities such as gold. The NYSE remained closed in the days following September 11th, but international markets took a significant hit.
On May 6th, 2010 the Dow Jones industrial experienced a “flash crash”. The market saw a 1,000 point drop in a single day, but recovered partially by the close of business. The concern regarding the debt crisis in Greece was partially to blame for the flash crash.
Each stock market crash has been attributed to specific instances, but it is safe to say that all news, regardless of what it entails, could potentially cause a problem within an economically unstable world. It is safe to say that the world of stock markets can be thrilling and volatile all that the same time.