Definition
The term Black Thursday refers to October 24, 1929, which marked the beginning of the Stock Market Crash of 1929. On Black Monday, the Dow Jones Industrial Average would fall 33 points, which was approximately 9% of its value.
Explanation
On October 24, 1929, also known as Black Thursday, the Dow Jones Industrial Average (DJIA) would decline 33 points, or lose 9% of its value, in just a single day. At the time, the volume on the stock exchange was around four million shares each trading day; however, on Black Thursday, a record 12.9 million shares were exchanged.
As prices dropped that day, the systems used to track the values of securities could not keep pace with the record trading volume. At one point, ticker tapes were running nearly 90 minutes behind the market. In addition to marking the beginning of the Stock Market Crash of 1929, Black Thursday also set the stage for the Great Depression.
The crash of 1929 eventually led to tighter regulation of the securities markets in the United States. The Securities Act of 1933 would ensure buyers receive complete and accurate information before investing in securities. The Securities Exchange Act of 1934 would govern the secondary trading of securities (including stocks, bonds, and debentures), and establish the Securities and Exchange Commission (SEC) to oversee and enforce these laws.
Related Terms
The term gray swan event refers to an incident of sizable impact, which can be anticipated, but has a relatively low probability of occurring. Often recognized in hindsight, individuals assume the risk of a gray swan event when they invest in financial markets.
Moneyzine EditorJanuary 19th, 2024
The term Black Tuesday refers to October 29, 1929, which marked the end of the Roaring 20s, and the starting point of the Great Depression. On Black Tuesday, the Dow Jones Industrial Average would fall 30 points, which was around 12% of its value.Moneyzine EditorJanuary 8th, 2024
The term circuit breaker refers to the policies and procedures that halt or stop trading when securities fall by a given percentage over a specified period of time. Circuit breakers were put into place by the Securities and Exchange Commission following the Stock Market Crash of 1987.Moneyzine EditorJanuary 11th, 2024
The term Black Monday refers to October 19, 1987, when the stock market would lose 22% of its value in a single day as measured by the Dow Jones Industrial Average. Black Monday is considered to be one of the most infamous trading days in the history of investing.Moneyzine EditorJanuary 8th, 2024
The term Kennedy Slide of 1962 is used to describe the decline in the stock market that occurred between December 1961 and June 1962. Although the exact cause of the Kennedy Slide of 1962 was never isolated, it was thought to be a result of a swift change in investor sentiment.Moneyzine EditorJanuary 23rd, 2024
