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Black Monday: Dow Jones Industrial Average Falls 508 Points (1987) Options
Daemon
Posted: Thursday, October 19, 2017 12:00:00 AM
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Black Monday: Dow Jones Industrial Average Falls 508 Points (1987)

On what is known in the financial world as Black Monday, the Dow Jones Industrial Average fell 508 points, nearly 23%—the largest drop since 1914. Although the cause of the crash is still debated, its result was immediately apparent: it sent the value of markets plummeting worldwide. By the end of the month, markets in Hong Kong and Australia had lost over 40%. That December, a group of eminent economists predicted that the next few years could be the worst since the Great Depression. Were they? More...
raghd muhi al-deen
Posted: Thursday, October 19, 2017 8:36:13 AM

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Black Monday (1987)
Black Monday (1987)
DJIA (19 July 1987 to 19 January 1988).
FTSE 100 Index (19 July 1987 to 19 January 1988).

In finance, Black Monday refers to Monday October 19, 1987, when stock markets around the world crashed, shedding a huge value in a very short time. The crash began in Hong Kong and spread west to Europe, hitting the United States after other markets had already declined by a significant margin. The Dow Jones Industrial Average (DJIA) dropped by 508 points to 1738.74 (22.61%).[1]
Market effects

By the end of October, stock markets in Hong Kong had fallen 45.5%, Australia 41.8%, Spain 31%, the United Kingdom 26.45%, the United States 22.68%, and Canada 22.5%. New Zealand's market was hit especially hard, falling about 60% from its 1987 peak, and taking several years to recover.[2] (The terms Black Monday and Black Tuesday are also applied to October 28 and 29, 1929, which occurred after Black Thursday on October 24, which started the Stock Market Crash of 1929. In Australia and New Zealand the 1987 crash is also referred to as Black Tuesday because of the timezone difference.) The Black Monday decline was the largest one-day percentage decline in the Dow Jones. (Saturday, December 12, 1914, is sometimes erroneously cited as the largest one-day percentage decline of the DJIA.[3][4] In reality, the ostensible decline of 24.39% was created retroactively by a redefinition of the DJIA in 1916.[5][6])

Following the stock market crash, a group of 33 eminent economists from various nations met in Washington, D.C. in December 1987, and collectively predicted that “the next few years could be the most troubled since the 1930s”.[7] However, the DJIA was positive for the 1987 calendar year. It opened on January 2, 1987 at 1,897 points and closed on December 31, 1987 at 1,939 points. The DJIA did not regain its August 25, 1987 closing high of 2,722 points until almost two years later.
Timeline
Timeline compiled by the Federal Reserve.

In 1986, the United States economy began shifting from a rapidly growing recovery to a slower growing expansion, which resulted in a "soft landing" as the economy slowed and inflation dropped. The stock market advanced significantly, with the Dow peaking in August 1987 at 2722 points, or 44% over the previous year's closing of 1895 points.

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