Published On: Thu, Oct 19th, 2017

19th October 2017: 30th anniversary of Dow’s infamous ‘Black Monday’ market crash

Share This

It is 30 years since the biggest single-day stock market collapse in the US, the reverberations of which sent share prices in major global markets tumbling.

On Monday, October 19, 1987, the Dow Jones Industrial Average crashed 508 points or nearly 23 percent to close at 1739. The collapse ended the five year bull run in US equities that had begun in 1982.

Much of the blame for the panic selling on that day was heaped on program trading, a strategy in which computers execute trades when certain price limits are breached.

On October 19, 1987 stock markets around the world crashed, starting in Hong Kong and spreading west to Europe, before hitting the United States.

The crash began in Far Eastern markets but accelerated in London time – because the City had closed early on October 16 due a storm – and by 9.30am the London FTSE 100 had fallen over 136 points. Later that morning, two US warships shelled an Iranian oil platform in the Persian Gulf in response to Iran’s Silkworm missile attack on the Sea Isle City.

The Dow is now at its second-most overbought condition in 22 years. And the third-most overbought in 62 years. The big-cap “FANG” tech stocks — Facebook (FB), Apple (AAPL), Netflix (NFLX) and Google (GOOG) — actually drifted lower. And the CBOE Volatility Index crept off its midday lows, suggesting that some late-session doubts crept into Wall Street’s psyche.

Leave a comment