HISTORY - Business History of Organized Trading

Interesting Dates

May 17, 1792 - Group of twenty-four traders gathered under buttonwood tree at 68 Wall Street in lower Manhattan to mete out conditions, regulations of  speculative market; resulted in Buttonwood Agreement, modest, two-sentence contract that gave birth to New York Stock Exchange; established stricter rules, parameters to more effectively govern trading (previously speculators had conducted auctions twice a day in various locations, including street corners and coffeehouses); Bank of New York - first corporate stock traded.

1817 - Brokers formalized arrangement, created New York Stock & Exchange Board with rented rooms on Wall Street; constitution specified appropriate business conduct.

March 16, 1830 - New York Stock Exchange slowest day ever (31 shares traded).

October 25, 1861 - Toronto Stock Exchange created.

September 11, 1862 - Forty members organized San Francisco Stock and Exchange Board (adopted by-laws, elected officers) as marketplace for mining company stocks after Comstock Lode strike, first mining exchange; rented room in Montgomery Block; J. B. E. Cavallier President.

January 4, 1865 - New York Stock Exchange (NYSE) opened first Corinthian-style structure permanent headquarters at 10-12 Broad near Wall Street in New York City; 1903 - more spacious quarters opened at 18 Broad Street; trading floor still used today.

December 9, 1865 - New York Stock Exchange opened in new home at 10-12 Broad Street in lower Manhattan.

November 15, 1867 - First stock 'ticker' unveiled (name of sound its type wheel made); brainchild of Edward A. Calahan, of Gold & Stock Telegraph Company, who configured a telegraph machine to print stock quotes on streams of paper tape; March 31, 1868 - Calahan received a patent for an "Improvement in Telegraph Indicators" ("for the prices of gold, stocks, etc....consists of a transmitting-instrument formed as a disk, upon which are marked the signals, numbers or words to be pointed out"); April 21, 1868 - received second patent or an "Improvement in Printing-Telegraphs" ("for Registering Gold, Stocks, etc....intended to accomplish...a correct record of various fluctuations in the price of gold, stocks, and articles of trade, and to have these fluctuations simultaneously and periodically denoted and registered at the various centers of business connecting with one central transmitting station"); assigned to Gold & Stock Telegraph Company; November 9, 1869 - Thomas Edison received patent  for an "Electrical Printing Instrument" ("Improvement in Printing-Telegraph Apparatus"); easier-to-use version of Calahan's ticker, Edison's first lucrative invention; eventually replaced by computerized tickers with electronic displays.

1868 - Membership on the NYSE held as a valuable property. Seats limited to 1,366. New members must buy seats from existing members. 

October 23, 1869 - New York Stock Exchange put memberships up for sale for the first time in its seventy-seven-year history.

November 1, 1871 - NYSE passed stern law forbidding members from "dealing with" non-members in "rooms of the Exchange;" punishment for   infraction was suspension lasting anywhere from sixty days to one year.

June 4, 1875 - Pacific Stock Exchange opens.

November 15, 1876 - Stock ticker was unveiled; fed traders a steady stream of information

May 15, 1878 - Tokyo Stock Exchange formed; first public trading institution on Japan; April 1, 1949 - Tokyo Stock Exchange, in current form, founded; January 31, 2007 - TSE and NYSE agree on alliance on technology, investment products, more.

November 13, 1879 - New York Stock Exchange installed telegraph and phone lines.

September 18, 1882 - 19 brokers signed charter, deposited $50 each, organized Local Security Board to trade in stocks and bonds of corporations other than mining shares; John Perry, Jr., President; October 2, 1882 - renamed San Francisco Stock and Bond Exchange; March 1883 - daily list of quotations, transactions first printed; September 1, 1883 - total business in first year $9,490,621; January 2, 1957 - merged with Los Angeles Oil Exchange (organized December 1899), renamed Pacific Stock Exchange; 1973 - renamed Pacific Stock Exchange; 1997 - renamed Pacific Exchange; May 26, 2001 - trading floor closed, transferred to electronic format, Archipelago Exchange; September 27, 2005 - acquired by Archipelago Holdings for $40 million, 10.8% equity stake.

December 15, 1886 - Record 1.2 million shares changed hands in frantic trading.

May 26, 1896 - Charles Dow first published Dow Jones Industrial Average of a dozen 'smokestack' company stocks: American Cotton Oil, American Sugar, American Tobacco, Chicago Gas, Distilling & Cattle Feeding, General Electric, Laclede Gas, National Lead, North American (utility), Tennessee Coal & Iron, U.S. Leather (preferred), U. S. Rubber; 1884 - Charles Dow's initial stock average contained 11 stocks (9 railroad stocks) appeared in "Customers' Afternoon Letter", daily, 2-page financial news bulletin (precursor of the Wall Street Journal); October 4, 1916 - list of 20 industrial stocks (all common shares) replaced previous list of 12; October 1, 1928 - Dow Jones Industrial Average 30 began, expanded from 20 to 30 stocks; divisor (16.67) introduced to adjust for effects of stock splits, stock distributions, stock substitutions.

October 7, 1896 - Dow Jones began reporting an average of the prices of 12 industrial stocks in the Wall Street Journal.

May 28, 1897 - Dow Jones Industrial Average (12 stocks) moved up for 14 trading days in a row (through June 14); total gain of 3.75 points, 9.56%, closed at 42.96; longest streak in history.

September 9, 1901 - Workers laid the cornerstone for a new NYSE building at 18 Broad Street. Finished in 1903 (still open today), the new quarters included a trading floor that was over twice the size of its predecessor.

November 9, 1903 - Panic of 1903 reached its nadir--Dow dropped to 42.15 as the stocks of industrial companies plunged to single-digit lows. Also known as the "Rich Man's Panic," the fiscal crisis dragged on for the rest of the year, took a severe toll on banks, as well as many steel and iron producers.

1904 - National Quotation Bureau began as paper-based, inter-dealer quotation service; linked competing market makers in OTC securities across country; Pink Sheets and the Yellow Sheets - central resource for trading information in OTC stocks and bonds.

January 12, 1906 - 1st time Dow Jones closes above 100.

1908 - American Stock Exchange traces its roots to those traders officially organized as the New York Curb Agency. The Curb moved indoors in 1921.

July 31, 1914 - Treasury Secretary William McAdoo closed the New York Stock Exchange; protected stock of gold in U.S., gave young Federal Reserve System chance to get organized (opened on November 16, 1914); set foundation for shift away from pound sterling to the dollar as international reserve currency after World War I; concerned that sellers, mainly British and French, would then convert the dollar proceeds to gold, ship it to Europe to finance their war efforts, effectively wipe out U.S. gold stock. Without gold, young Federal Reserve would have nothing to back its note issue, diminishing its credibility as central bank. By also insisting that the U.S. remain on the gold standard while everybody else but England was going off of it, McAdoo signaled that the U.S. was determined to honor its foreign debt, preventing a massive devaluation of the dollar. Of course, if foreigners couldn't convert stock assets to dollars in the first place, staying on the gold standard would be much easier for the U.S. Nevertheless, such bold and decisive action by McAdoo set the foundation for the shift away from the pound sterling to the dollar as the international reserve currency after World War I. Contrasts with popular belief that Governing Board of NYSE initiated closure of exchange in face of massive sell-off in shares as means to protect share price (McAdoo wasn't concerned about sell-off in shares driving down prices, for American bargain hunters (the "Shorts") would snap up the shares).

November 28, 1914 -  New York Stock Exchange, closed since July, re-opened for bond trading with a set of restrictions designed to keep the markets from crumbling during the war.

December 1, 1914 - San Francisco Stock & Bond Exchange became the first U.S. exchange to re-open for after nation's markets temporarily shut down to safeguard against a debilitating bear run with the outbreak of World War I.

December 12, 1914 - The Dow Jones Industrial Average suffered its worst percentage drop in history (since first published in 1896) - 24.39 percent - on the first day of trading in more than four months. (The New York Stock Exchange had shut down when World War I began in July); DJIA dropped 40% late 1916 to early 1917.

December 15, 1914 - NYSE re-opens, after being closed for over four months, with a tight set of trading restrictions designed to prevent fiscal disaster.

November 29, 1918 - New York Stock Exchange Building Co. acquires the nearby Mortimer Building (fifteen years after NYSE moved into new offices at 18 Broad Street); 1922 - Exchange opened new offices in a twenty-three-story tower, featured extra trading space, dubbed the "garage."

January 2, 1919 - The New York Stock Exchange installed a separate ticker to track bond trading.

October 2, 1922 - The New York Stock Exchange opened new offices, eleven-story building at 11 Wall Street.

May 13, 1927 - "Black Friday" on Berlin Stock Exchange.

October 1, 1928 - The Dow Jones Industrial Average expanded from 20 to 30 stocks.

May 21, 1929 - Sutro and Company of New York City put automatic electric stock quotation board into operation.

August 9, 1929 - Wall Street got an inkling of the upcoming crash as the New York Bank raised the rediscount rate on loans to brokers a full point to 6 percent. The hike was precipitated by the unsettling news that brokers had racked up a record $6 million debt, the fourth time during August 1929 that their loans had swelled to record levels; August 10 - Dow dropped 14.11 points to close at a month-long low of 337.99. Until that point, investors had been reveling in "Big Bull Market," a record-setting run which was well over a year old.

September 3, 1929 - The Dow Jones Industrial Average closed at a pre-Crash high of 381.17.

October 29, 1929 (Black Tuesday) - Stock prices collapsed on the New York Stock Exchange amid panic selling; most disastrous trading day in the stock market's history. Billions of dollars in open market values, thousands of investors, were wiped out as prices crumbled under the pressure of liquidation of securities which had to be sold at any price. It was estimated that 880 issues on the New York Stock Exchange lost between $8,000,000,000 and $9,000,000,000 yesterday. Added to that loss is the depreciation on issues on the Curb Market, in the over the counter market and on other exchanges; leading stocks were able to rally in the final fifteen minutes of trading, a measurable snapback from the lows: American Can gained 10; United States Steel common, 7 1 /2, General Electric, 12; New York Central, 14 1/2, Anaconda Copper, 9 1/2; Chrysler Motors 5 1/4; Montgomery Ward, 4 1/4 and Johns Manville, 8. Even with these recoveries the losses of these particular stocks, and practically all others, were staggering. Collapse started last Thursday (October 24), when 12,800,000 shares were traded on the Exchange, and holders of stocks commenced to learn just what a decline in the market means; the storm broke again on Monday across the board in every industry, followed by Tuesday's tremendous trading of 16,410,030 shares.

February 2, 1932 - The Federal Reserve announced a ban on bank loans for margin trades.

July 8, 1932 - The stock market fell to its lowest point during the Depression (41.22).

1935 - FT-30 index founded; 2007 - only three companies from original FT-30 index still listed: GKN, ICI, Tate & Lyle.

October 31, 1938 - In an effort to try restore investor confidence, the New York Stock Exchange unveils a fifteen-point program aimed to upgrade protection for the investing public.

March 12, 1956 - Dow Jones closed above 500 for first time (500.24).

March 1, 1957 - Standard & Poor's Corporation (Standard Statistics Company merged with Poor's Publishing in 1941) introduced S & P 500 Index (with daily estimates), representative sample of 500 leading companies in leading industries of U.S. economy (predecessor stock market indicator - Standard Statistics Company Average of Stock Prices developed in 1926 = 100); characterized by: 1) approximately 75% of U.S. equities market covered; 2) market capitalization weighted, 3) minimum o $ 4 billion capitalization, 4) at least 50% public float, 5) reconstituted as needed; 1957 - a) 'materials' (steel, aluminum, chemical, paper, mining) biggest industrial sector represented, b) materials, energy = 50% of index value (12% in 2006); c) AT&T largest company - $11.2 billion market capitalization; 1957-2006 - 1) average annual return of 10.83% ($1000 in S & P in 1957 = $168,000 in 2006); 2) best performing company - Altria (old Philip Morris) with 19.88% annual return ($1000 in 1957 = $8.4 million in 2006); 3) 111 companies survived intact (PepsiCola, Coca-Cola, Colgate Palmolive, Heinz, Wrigley, Procter & Gamble, Hershey, Tootsie Roll Industries); 4)  almost 1,000 companies have been added to index as others were dropped (bankruptcies, mergers, corporate changes).

February 12, 1970 - Joseph Louis Searles III becames the first black member of the New York Stock Exchange.

February 8, 1971 - Gordon Macklin, president of the National Association of Securities Dealers opened NASDAQ (National Association of Securities Dealers Automated Quotations); system went live via cathode-ray terminals to more than 500 market-makers across the U. S. in stocks of 2,500 companies; trading volume of 2.2 billion shares; 1973 - volume twice as big as AMEX; 1983 - topped NYSE in single-day trading volume seven times; 1987 - regulated activities of almost 7,000 broker-dealer members with 400,000 employees; listed 4.500 companies; trading volume of 30 billion shares; 2006 - Nasdaq Stock Market, Inc. (for-profit company separate from NASD) trading volume of 482.3 billion shares (vs. 405.9 billion shares on the NYSE [608.2 billion shares in NYSE composite volume]).

November 14, 1972 - The Dow Jones Industrial Average closed above 1,000 for the first time, at 1,003.16; International Business Machines, Wall Street's best known glamour issue, moved up 11 1/4 points to 388, its best price of the day; American Telephone rose 5/8 to 51 1/2, finishing at its highest price since early 1971; du Pont, up 2 3/8 to 177 3/8, and Chrysler, up 1 1/8 to 38 1/8; Polaroid, up 6 to 115, Johnson and Johnson, 5 1/4 to 128 3/4; Disney, 3 3/8 to 189; Motorola, 4 to 121 1/2; ARA Services, 5 3/4 to 142 3/4; Texas Instruments, 6 5/8 to 166, and Xerox, 4 3/8 to 151 5/8.

May 1, 1975 - New York Stock Exchange abolishes fixed commissions per share on trades in favor of a negotiated commission rate structure; wrought havoc on brokerage firm revenue-generating prospects.

August 12, 1982 - Bull Run of the 1980s Begins; DOW dropped to 776.92; next day, the capital markets began five-year run in which the DOW flirted with the 3000 point barrier. The Bull Run of the '80s finally snapped in 1987 with a 500-point crash.

February 24, 1983 - Dow Jones closes above 1100 mark for 1st time.

January 3, 1984 - FTSE-100 first compiled (by FTSE International, joint venture of London Stock Exchange and The Financial Times, subsidiary of Pearson), with base value of 1,000; total market capitalization rose from £100.15 billion on January 3rd 1984 to £1,110.84 billion on January 5th 2004.

February 13, 1985 - Dow Jones closes at 1297.92 (record high) after topping 1300 earlier.

January 8, 1987 - The Dow Jones industrial average closed above 2,000 for the first time, ending the day at 2,002.25.

April 21, 1987 - Dow Jones Industrial Average soared 664.7; second biggest one-day gain in history.

March 12, 1987 - Dow Jones Industrial Average added Coca-Cola, Boeing Company; dropped Inco Ltd., Owens-Illinois Glass.

July 17, 1987 - Dow Jones closed above 2,500 (2,510.04) for first time.

August 13, 1987 - Wall Street celebrated the five-year anniversary of the dawn of the Bull Run by shortly surging past the 2,700-point mark. The Dow Jones Industrial Average closed the day at 2,691.49; August 17, 1987 - closed above 2,700 for first time (2,700.57).

August 21, 1987 - Bull run topped out at then-unprecedented 2772.4 points.

October 19, 1987 - The stock market crashed as the Dow Jones Industrial Average plunged 508 points, or 22.6 percent in value - its second biggest percentage drop; 604 million share volume, nearly doubled record; tape 2 Hours Late.

January 29, 1989 - Dow jumps 38.06 recoups 508-pt loss since Oct 1987; index at 2,256.43.

April 17, 1991 - The Dow Jones industrial average closed above 3,000 for the first time.

October 30, 1991 - BET Holdings Inc. became the first African-American company listed on the New York Stock Exchange.

February 23, 1995 - Dow Jones closes above 4,000 for 1st time (4,003.33).

November 21, 1995 - The Dow Jones industrial average closed above 5,000 for the first time.

December 15, 1995 - Big Board trading hit record: 652.8 million shares traded, topped old mark of 608.2 million shares set on October 20, 1987.

October 14, 1996 - The Dow Jones Industrial Average gains 40.62 to 6,010.00; closed above 6,000 for the first time ever.

November 25, 1996 - Dow charged past 6,500 for the first time in history (confidence in the dollar, dwindling interest rates on U.S. Treasury Bonds).

February 13, 1997 - The Dow Jones industrial average broke through the 7,000 barrier for the first time, closing at 7,022.44.

October 27, 1997 - By 2:00 P.M., the Dow had dropped 323.42 points; Wall Street invoked "circuit-breaker rules" (passed in the wake of the 1987 crash); mandated trading halts or "cooling off" periods to be invoked when the market drops so many points that it seems headed for disaster; next day Dow surged to a record gain of 337.1 points.

November 24, 1997 - Dow drops 554.26 points, New York Stock Exchange officials invoked the "circuit breaker" rule for the first time; halted trading;  subsequent changes to "circuit breaker" rules ensured that trading halts only be implemented when the Dow Jones industrial average dropped by at least 10 or 20 percent.

April 3, 1998 - The Dow Jones industrial average climbed above 9,000 for the first time.

March 29, 1999 - The Dow Jones industrial average closed above 10,000 for the first time, at 10,006.78.

December 29, 1999 - The Nasdaq composite index closed above 4,000 for the first time, ending the day at 4,041.46.

January 14, 2000 - Dow Jones Industrials closed at an all-time high, 11,722.98.

March 10, 2000 - NASDAQ Composite Index traded to an intraday high of 5132.52, closed at 5048.62, the peak of the Internet bubble; October 2002 -  hit low of 1108, a loss of 78%.

(source: http://bigpicture.typepad.com/comments/images/wsj_infonasbubble0503_3.gif)

August 28, 2000 - The New York Stock Exchange began listing the prices of seven stocks in dollars and cents; previously all stock was listed in fractions.

September 17, 2001 - Wall Street trading resumed for the first time since the Sept. 11 terrorist attacks - its longest shutdown since the Depression; the Dow lost 684.81 points, its worst-ever one-day point drop.

September 17, 2003 - New York Stock Exchange chairman Dick Grasso resigned amid a furor over his $139.5 million pay package.

March 8, 2006 - New York Stock Exchange went public.

October 19, 2006 - Dow Jones Industrial Average closed above 12,000 for first time in history (12011.73, up 19.05).

April 25, 2007 - Dow Jones Industrial Average closed above 13,000, at 13,089.89, for first time, up 135.95 on volume of more than 250 million shares.

July 19, 2007 - Dow Jones Industrial Average closed above 14,000 for the first time in history, at 14,000.41.

November 5, 2007 - PetroChina, subsidiary of China's state-owned China National Petroleum, first half 2007 revenues less than one-third of Exxon Mobil, debuted on Shanghai Stock Exchange (13% of available float), tripled in price, became most valuable company in corporate history with a market capitalization in excess of $1 trillion.

20-year winners (October 19, 1987 - October 18, 2007)

Twenty stocks in the S&P 1,500 index that have delivered the highest total return since the 1987 stock market crash.

Company 20-year total return* Business
International Game Technology 35,080% Casino gaming systems
UnitedHealth Group 32,984 Health maintenance organization
Jack Henry & Assoc. 22,811 Computer systems for financial institutions
NBTY 20,451 Nutritional supplements (Nature's Bounty)
WMS Industries 19,060 Gaming, lottery machines
Kansas City Southern 17,201 Railroad
Fastenal 17,199 Distributes industrial supplies
Oracle 13,290 Business software
Weatherford Intl. 12,923 Oil field services
Micros Systems 12,876 Computer systems for hospitality
Jefferies Group 12,846 Investment banking
Best Buy 12,283 Electronics retailer
Eaton Vance 12,202 Mutual funds
Harley Davidson 12,055 Motorcycles
Sierra Health Services 11,770 Managed health care
Expeditors International 11,454 Transportation logistics
Microsoft 11,447 Software
Amgen 11,424 Biotechnology
Clear Channel Communications 11,219 Broadcasting

*Includes share-price appreciation plus dividends from Oct. 19, 1987, through Wednesday.                                Returns are adjusted for splits and spin-offs.                                                                                                                 Source: FactSet Research Systems, SF Chronicle research

STOCK MARKET RETURNS

Annual Returns on Stock, T. Bonds and T. Bills: 1928 - Current

The raw data comes from the Federal Reserve data site in St. Louis.

Annual Returns on Investments in Compounded Value of $ 100
Year Stocks T.Bills T.Bonds
Stocks
T.Bills
T.Bonds
1928 43.81% 3.08% 0.84%
$ 143.81
$ 103.08
$ 100.84
1929 -8.30% 3.16% 4.20%
$ 131.88
$ 106.34
$ 105.07
1930 -25.12% 4.55% 4.54%
$ 98.75
$ 111.18
$ 109.85
1931 -43.84% 2.31% -2.56%
$ 55.46
$ 113.74
$ 107.03
1932 -8.64% 1.07% 8.79%
$ 50.66
$ 114.96
$ 116.44
1933 49.98% 0.96% 1.86%
$ 75.99
$ 116.06
$ 118.60
1934 -1.19% 0.30% 7.96%
$ 75.09
$ 116.41
$ 128.05
1935 46.74% 0.23% 4.47%
$ 110.18
$ 116.68
$ 133.78
1936 31.94% 0.15% 5.02%
$ 145.38
$ 116.86
$ 140.49
1937 -35.34% 0.12% 1.38%
$ 94.00
$ 117.00
$ 142.43
1938 29.28% 0.11% 4.21%
$ 121.53
$ 117.12
$ 148.43
1939 -1.10% 0.03% 4.41%
$ 120.20
$ 117.16
$ 154.98
1940 -10.67% 0.04% 5.40%
$ 107.37
$ 117.21
$ 163.35
1941 -12.77% 0.02% -2.02%
$ 93.66
$ 117.23
$ 160.04
1942 19.17% 0.33% 2.29%
$ 111.61
$ 117.62
$ 163.72
1943 25.06% 0.38% 2.49%
$ 139.59
$ 118.06
$ 167.79
1944 19.03% 0.38% 2.58%
$ 166.15
$ 118.51
$ 172.12
1945 35.82% 0.38% 3.80%
$ 225.67
$ 118.96
$ 178.67
1946 -8.43% 0.38% 3.13%
$ 206.65
$ 119.41
$ 184.26
1947 5.20% 0.38% 0.92%
$ 217.39
$ 119.87
$ 185.95
1948 5.70% 0.95% 1.95%
$ 229.79
$ 121.01
$ 189.58
1949 18.30% 1.16% 4.66%
$ 271.85
$ 122.41
$ 198.42
1950 30.81% 1.10% 0.43%
$ 355.60
$ 123.76
$ 199.27
1951 23.68% 1.34% -0.30%
$ 439.80
$ 125.42
$ 198.68
1952 18.15% 1.73% 2.27%
$519.62
$ 127.59
$ 203.19
1953 -1.21% 2.09% 4.14%
$ 513.35
$ 130.25
$ 211.61
1954 52.56% 1.60% 3.29%
$ 783.18
$ 132.34
$ 218.57
1955 32.60% 1.15% -1.34%
$ 1,038.47
$ 133.86
$ 215.65
1956 7.44% 2.54% -2.26%
$ 1,115.73
$ 137.26
$ 210.79
1957 -10.46% 3.21% 6.80%
$ 999.05
$ 141.66
$ 225.11
1958 43.72% 3.04% -2.10%
$ 1,435.84
$ 145.97
$ 220.39
1959 12.06% 2.77% -2.65%
$ 1,608.95
$ 150.01
$ 214.56
1960 0.34% 4.49% 11.64%
$ 1,614.37
$ 156.75
$ 239.53
1961 26.64% 2.25% 2.06%
$ 2,044.40
$ 160.28
$ 244.46