MARY REICHARD, HOST: Coming up next on The WORLD and Everything in It: The Monday Moneybeat.
NICK EICHER, HOST: After we run the numbers, I’ll bring in our market analyst David Bahnsen to talk about Wall Street’s worst day since the crash of 1987, and a week on the New York Stock Exchange that has ushered in a new financial era.
To make room for that, and in the spirit of postponing things related to coronavirus, we’ll put off this week’s regular WORLD History Book. Because what’s happening even now is truly historic, a series of events around the globe and in the economy that I rather expect Paul Butler will find significant enough to refer to a year from now around the time of the anniversary.
So let’s think back to 1987 and the day in financial history known as Black Monday. The Dow Jones Industrial Average on that day alone more than 30 years ago lost about a fifth, or more than 20 percent, of its value. But the event inspired an immigrant sculptor to create and give a gift to America. Arturo DiModica was saying, chin up, countrymen.
DIMODICA: After the stock market, you know, crash, that’s my idea of what I’m gonna do. I did the bull, because the bull means power.
He called it Charging Bull, a three-and-a-half ton bronze monument to American free-market optimism. DiModica had the bull cast and delivered on December 14th, 1989, right outside the stock exchange, paid out of his own pocket. A Christmas gift to the country that had given him economic opportunity.
Now, however well-intended, one does not simply plop down 7,000 pounds of bronze in the middle of the biggest city in America, and not attract New York’s finest.
It was an unlawful act, but nonetheless an act that eventually won New York City’s official approval, however reluctant.
The bull, of course, stands for bull market. A bull market is an environment of rising prices and rising expectations. For 11 years straight, that’s what Wall Street has experienced: a bull market.
But last week, the bulls got quarantined.
REICHARD: Yes, they did, and losses for the week in the major stock indexes ranged from 8 percent to 10. Those losses weren’t as big as losses at the end of February, but when you take them together, by market close on Thursday, the Dow, the Standard & Poor’s 500, and the Nasdaq officially brought about the end of the bull-market run. Black Thursday, we’ll call it.
The losses stood perilously close to 30 percent below the very recent high point.
EICHER: But Friday was a day of recovery, with stocks up 4 to 5 percent. As President Trump outlined the national emergency he’d just declared, stocks in the last 30 minutes of trading doubled their gains, and all the indexes finished the day up almost 10 percent.
Of course, that wasn’t nearly enough to recoup all the losses to that point.
Going into today’s trading, the Nasdaq stands off 19.8 percent from the record high. The S&P 500 down 19.9. The Dow, minus -21.5 percent.