In retrospect, it is easy to understand why the stock market crash of 1929 occurred if it was not very easy to see while it was going on. Historians remain divided as to whether or not this stock market crash set off the Great Depression or whether it was only a contributing factor. At any rate, very many things went on that helped send the New York Stock Exchange downwards spectacularly.
For much of the 1920s– sometimes known as the Roaring 20s– people looked at the stock exchange with a favorable eye, even if it was and still is built on a bit of risk. The bull markets that were going on seem to point out that there would never be an end or a drop-off and vast numbers of investors were enticed into the market. This led to an upward spiral of stock prices. Just in case you are intrigued by this topic, view; short term loans Houston Texas.
In 1928, the stock market reached its most vigorous and was growing at ever quicker paces. Many people thought that this tremendous boom would continue forever, though a drop-off was inevitable and coming sooner than many people realize. A lot of people were dumping their life savings into the stock exchange in anticipation of making a quick short-term profit. 1929 would wake them completely up.
More and more people were getting involved on the stock exchange by around 1925. Then in 1927, there was a really strong upward price trend. This enticed even more people to enter into the stock market. The stock market boom had taken off by 1928.
At this point, the stock market looked like a place where virtually everyone thought they could become rich. The stock market had reached a fever pitch. Everyone thought they were an expert. Stocks were talked about everywhere. Tips were given by almost everyone. Lesson number one: Beware when the fever pitch is high, and everyone thinks they’re a captain of the stock market, getting richer by the day. Beware when everything seems too great to be true. Tips are given out by almost everyone.
In the Summer of 1929, the market surged ahead again, and all early warning signs were forgotten. From June through August, the stock market reached its highest price level ever. Nearly everyone thought it was a stock market heaven. This would never end. Lesson number three: When the market seems too great to be true, it probably is, and right at the least, a correction is coming soon.
The reason the trapdoor fell open on that day is mainly attributable to the fact that large numbers of investors were obliged to sell off their stocks as they were overextended and stockbrokers began to call in their margins. However, a large group of bankers rushed in and pumped a great deal of money into the market to stabilize it. It looked, initially, as if it would succeed though Friday would still be very shaky.
When the markets opened on the morning of Monday the 28th, a panic ensued and a huge selloff of stocks commenced. Many investors were so panicked at the idea of not recovering a dime that they sold their stocks or whatever they could get. No support on the side of bankers would be forthcoming that day. The next day–‘ Black Tuesday’– proved the worst day ever in the story of the market.
Panic gripped the markets in a manner that had never been witnessed before and so many people do not their stock that it was ours until after the end of the market that every trait could be accounted for, on the 29th. Prices had fallen completely through the floor, a rumour had circulated that banks are selling off their own stocks and a run on the banks all in all parts of the country commenced.
Those four days would presage a decline in the markets that would reach its nadir on July 8th, 1932 when the Dow Jones Industrial Average that day closed at 41. 22. This was, in absolute and relative terms, the last closing mark ever in the story of the stock market.
U.S. stock market marks nine days as holiday every year. These nine holidays are aside from the regular closing days, I.e. Saturdays and Sundays. Holidays of U.S. stock market are identical to the NYSE Holidays. Following are the terms of the holiday list of the stock market.
The first day of the year, 1st January, is deemed to be a holiday. According to the rules, if the holiday falls on Sunday, then the market remains closed on the following day, that is Monday, and when it falls on Saturday, the day before Saturday, I.e. Friday is deemed to be a holiday. But if the New Year Day is Saturday then Friday is the last accounting day of the month as well as the year. Hence both Friday and Monday are considered working days. 2nd January will be observed holiday as 1st January is falling on Sunday hence in the year 2012.
The last Monday of May is considered off in the U.S. stock market and considered as Memorial day. It is falling on 28th May this year.
Millions lost their life savings, companies went out of the discussions and all faith was lost in banks. It was a cataclysm never seen before or since.