Market Crash Of 87

            On October 19, 1987, the Dow Jones Industrial Average suffered its largest decline in its history. This caused many investors to worry about the possibility of the country heading into another depression. Fortunately, an event similar to the Great Depression did not materialize. Although we did not experience a depression, the ramifications of October 19, 1987 are still felt in today's economy. In order to understand the stock market crash of 1987 and prevent it from occurring again, we must understand first what happened, understand why it occurred, and finally understand what precautions have been taken and still can be taken to prevent an even like this from occurring again. .
             The first step in understanding the crash of 1987 is to understand what took place on what is now commonly referred to as "Black Monday." Dallas billionaire Ross Perot described the day as, "God tapping us on the shoulder a warning to get our act together before we get the big shock."(Newsweek 1987) On October 19, 1987 the Dow Jones Industrial averaged experienced its largest single day drop in its history. In one day, the Dow dropped by 508 points to finish at 1738. This 22.6% drop decreased the value of all American stocks by approximately $1 trillion. A 108-point drop foreshadowed this great drop on the previous Friday. Following Friday's drop, stocks immediately began to fall Monday morning. The fall seemed to have cooled down by lunch time but by mid-afternoon a huge sell-off began resulting in a loss of over 500 points for the DJIA. Many investors began to compare this drop to the stock market crash of 1929. Due to the crash of 1929, the Great Depression began. Fortunately, the market rebounded with a 102-point gain on the next day but not before many of the Dow Jones major corporations got hit hard. IBM, DuPont, and Coca-Cola are just a few of the major corporations that suffered losses over 15% in one day.