They are October 19, , October 28, , and the market correction of August 24, It also refers to the Monday after Thanksgiving. That's because holiday retail sales are in the black, or profitable. That day is called Cyber Monday as well. Black Monday is used most often to refer to the largest one-day percentage drop in stock market history.

What caused Black Monday, the stock market crash of ? | Investopedia

It occurred on October 19, , when the Dow Jones Industrial Average dropped It took two years for the Dow to regain this loss. The stock market had been in a bull market for five years.

It continued to stay in a slightly lower trading range until October 2. Then it began falling dramatically. What caused the crash? A Securities and Exchange Commission SEC study concluded that it was traders' fears over the impact of anti-takeover legislation that was moving through the House Ways and Means Committee. The bill was first introduced on Tuesday, October 13, and passed on October Furthermore, the stocks that fell the most were the companies that would have been hurt the most by the legislation.

What did the bill propose?

To eliminate the tax deduction for loans used to finance corporate takeovers. The s was the era of Michael Milken and Ivan Boesky, both of whom admitted engaging in illegal insider trading on upcoming mergers and acquisitions.

This bill, among others, was Congress' way to regulate the markets. Black Monday was Wall Street's reaction. Ironically, the tax deduction provision was stripped from the bill before it became law. There were other contributing factors, as well.

Computerized stock trading programs made the sell-off worse. They had set-points that automatically called in sell orders when the market dropped by a certain percentage. Dealers on the New York Stock Exchange were overwhelmed when all these programs acted at once. They couldn't find enough buyers for some stocks.

As a result, the stock exchange halted trading.

Black Monday () - Wikipedia

Another contributing factor was an announcement on October 16 by Treasury Secretary James Baker. He said the United States might let the value of the dollar fall.

That would make U. Baker thought that a lower dollar would help reduce the alarming rise in the U. Jennifer Itskevich, " What Caused the Stock Market Crash of ? Many feared the crash would cause a recession. However, the Federal Reserve started pumping money into banks. As a result, the market stabilized.

It spent the rest of the year in a narrow trading range, between 1, and 2, It was a precursor to the Savings and Loan Crisis and the recession. Black Monday also refers to October 28, It was the first Monday after Black Thursday , which kicked off the stock market crash of The sell-off was not enough to start the Great Depression of But it set the stage by shattering confidence in business investing.

As people realized that banks had used their savings to invest on Wall Street, they rushed to take out their deposits. Banks closed over the weekend, and then only gave out ten cents on the dollar.

Many people who had never invested in the stock market also lost their life savings. Banks without deposits went bankrupt.

Businesses couldn't get loans, and people couldn't buy houses. Wall Street investors turned to gold, driving up gold prices. Since the dollar was tied to the gold standard , people turned in dollars for gold, depleting reserves. In response, the Federal Reserve raised interest rates to protect the value of the dollar.

This contractionary monetary policy further aggravated the downward economic spiral. On August 24, , the Dow fell 1, points, to 15, However, it quickly recovered, and closed just points below the open. That makes it a market correction , not a crash. It followed a point drop the previous Friday. For more, see Dow Jones Closing History.

That's the first Monday after Thanksgiving. It is called Cyber Monday because it is known for online shopping sales. It is the follow-up to the bricks-and-mortar shopping done on Black Friday , the first shopping day after Thanksgiving.

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