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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.
1923 -
Standard and Poor's developed first stock market indicators; covered 26
industry groups, 233 companies; introduced base-weighted aggregate
technique to gauge stock market performance;
1926 - created 90 Stock Composite Price Index,
comprised 50 Industrials, 20 Rails, 20 Utilities; base period of
1926=100, calculated and published weekly; historical values available
to 1918; "233", industry group indices re-based to 1926=100, calculated
and published weekly; 1928
- 90 Stock Composite Price Index calculated, published daily;
1941 - "233" grew o 416,
comprised 72 industry sub-groups; "416", 90 Stock Composite re-based to
1935-39=100; 1957 - "416"
became Standard & Poor's 500 Composite Stock Price Index; introduced
computers, permitted "500" to be calculated, disseminated at one-minute
intervals throughout trading day; new "500" linked to 90 Stock Composite
Price Index; daily S&P 500 Index prices available to 1928; "500"
consisted of 425 Industrials, 60 Utilities, 15 Rails; base period of
1941-43=10.
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 |
|
1962 |
-8.81% |
2.60% |
5.69% |
$ 1,864.26
|
$ 164.44
|
$ 258.38 |
|
1963 |
22.61% |
2.87% |
1.68% |
$ 2,285.80
|
$ 169.16
|
$ 262.74 |
|
1964 |
16.42% |
3.52% |
3.73% |
$ 2,661.02
|
$ 175.12
|
$ 272.53 |
|
1965 |
12.40% |
3.84% |
0.72% |
$ 2,990.97
|
$ 181.84
|
$ 274.49 |
|
1966 |
-9.97% |
4.38% |
2.91% |
$ 2,692.74
|
$ 189.81
|
$ 282.47 |
|
1967 |
23.80% |
4.96% |
-1.58% |
$ 3,333.69
|
$ 199.22
|
$ 278.01 |
|
1968 |
10.81% |
4.97% |
3.27% |
$ 3,694.23
|
$ 209.12
|
$ 287.11 |
|
1969 |
-8.24% |
5.96% |
-5.01% |
$ 3,389.77
|
$ 221.59
|
$ 272.71 |
|
1970 |
3.56% |
7.82% |
16.75% |
$ 3,510.49
|
$ 238.91
|
$ 318.41 |
|
1971 |
14.22% |
4.87% |
9.79% |
$ 4,009.72
|
$ 250.55
|
$ 349.57 |
|
1972 |
18.76% |
4.01% |
2.82% |
$ 4,761.76
|
$ 260.60
|
$ 359.42 |
|
1973 |
-14.31% |
5.07% |
3.66% |
$ 4,080.44
|
$ 273.81
|
$ 372.57 |
|
1974 |
-25.90% |
7.45% |
1.99% |
$ 3,023.54
|
$ 294.21
|
$ 379.98 |
|
1975 |
37.00% |
7.15% |
3.61% |
$ 4,142.10
|
$ 315.24
|
$ 393.68 |
|
1976 |
23.83% |
5.44% |
15.98% |
$ 5,129.20
|
$ 332.39
|
$ 456.61 |
|
1977 |
-6.98% |
4.35% |
1.29% |
$ 4,771.20
|
$ 346.85
|
$ 462.50 |
|
1978 |
6.51% |
6.07% |
-0.78% |
$ 5,081.77
|
$ 367.91
|
$ 458.90 |
|
1979 |
18.52% |
9.08% |
0.67% |
$ 6,022.89
|
$ 401.31
|
$ 461.98 |
|
1980 |
31.74% |
12.04% |
-2.99% |
$ 7,934.26
|
$ 449.63
|
$ 448.17 |
|
1981 |
-4.70% |
15.49% |
8.20% |
$ 7,561.16
|
$ 519.28
|
$ 484.91 |
|
1982 |
20.42% |
10.85% |
32.81% |
$ 9,105.08
|
$ 575.62
|
$ 644.04 |
|
1983 |
22.34% |
7.94% |
3.20% |
$ 11,138.90
|
$ 621.32
|
$ 664.65 |
|
1984 |
6.15% |
9.00% |
13.73% |
$ 11,823.51
|
$ 677.24
|
$ 755.92 |
|
1985 |
31.24% |
8.06% |
25.71% |
$ 15,516.60
|
$ 731.83
|
$ 950.29 |
|
1986 |
18.49% |
7.10% |
24.28% |
$ 18,386.33
|
$ 783.79
|
$ 1,181.06 |
|
1987 |
5.81% |
5.53% |
-4.96% |
$ 19,455.08
|
$ 827.13
|
$ 1,122.47 |
|
1988 |
16.54% |
5.77% |
8.22% |
$ 22,672.40
|
$ 874.86
|
$ 1,214.78 |
|
1989 |
31.48% |
8.07% |
17.69% |
$ 29,808.58
|
$ 945.46
|
$ 1,429.72 |
|
1990 |
-3.06% |
7.63% |
6.24% |
$ 28,895.11
|
$ 1,017.59
|
$ 1,518.87 |
|
1991 |
30.23% |
6.74% |
15.00% |
$ 37,631.51
|
$ 1,086.18
|
$ 1,746.77 |
|
1992 |
7.49% |
4.07% |
9.36% |
$ 40,451.51
|
$ 1,130.39
|
$ 1,910.30 |
|
1993 |
9.97% |
3.22% |
14.21% |
$ 44,483.33
|
$ 1,166.79
|
$ 2,181.77 |
|
1994 |
1.33% |
3.06% |
-8.04% |
$ 45,073.14
|
$ 1,202.49
|
$ 2,006.43 |
|
1995 |
37.20% |
5.60% |
23.48% |
$ 61,838.19
|
$ 1,269.83
|
$ 2,477.55 |
|
1996 |
23.82% |
5.14% |
1.43% |
$ 76,566.48
|
$ 1,335.10
|
$ 2,512.94 |
|
1997 |
31.86% |
4.91% |
9.94% |
$ 100,958.71
|
$ 1,400.65
|
$ 2,762.71 |
|
1998 |
28.34% |
5.16% |
14.92% |
$ 129,568.35
|
$ 1,472.93
|
$ 3,174.95 |
|
1999 |
20.89% |
4.39% |
-8.25% |
$ 156,629.15
|
$ 1,537.59
|
$ 2,912.88 |
|
2000 |
-9.03% |
5.37% |
16.66% |
$ 142,482.69
|
$ 1,620.16
|
$ 3,398.03 |
|
2001 |
-11.85% |
5.73% |
5.57% |
$ 125,598.83
|
$ 1,712.99
|
$ 3,587.37 |
|
2002 |
-21.98% |
1.80% |
15.12% |
$ 97,996.61
|
$ 1,743.82
|
$ 4,129.65 |
|
2003 |
28.41% |
1.80% |
0.38% |
$ 125,838.91
|
$ 1,775.21
|
$ 4,145.15 |
|
|
|
|
|
|
Risk Premium
|
|
|
Arithmetic Average |
|
|
|
|
Stocks - T.Bills
|
Stocks - T.Bonds |
|
1928-2003 |
11.82% |
3.90% |
5.28% |
|
7.92%
|
6.54% |
|
1963-2003 |
12.10% |
6.01% |
7.40% |
|
6.09%
|
4.70% |
|
1993-2003 |
12.63% |
4.20% |
7.76% |
|
8.43%
|
4.87% |
|
|
|
|
|
|
Risk Premium
|
|
|
Geometric Average |
|
|
|
|
Stocks - T.Bills
|
Stocks - T.Bonds |
|
1928-2003 |
9.85% |
3.86% |
5.02% |
|
5.99%
|
4.82% |
|
1963-2003 |
10.82% |
5.97% |
7.00% |
|
4.85%
|
3.82% |
|
1993-2003 |
10.87% |
4.19% |
7.30% |
|
6.68%
|
3.57% |
[1]
Aswath Damodaran:
ST: Short term (6-month Treasury bill)
LT: Long term (10-year Treasury bond
[2]
Aswath Damodaran:
The risk premium will be computed from this year to the
current year.
Last updated: January 5, 2004 By Aswath
Damodaran (http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html)
Source of Stock Market Returns

Market Performance after Fed
Rate Increases (median
performance of the S&P 500 for a given number of trading days after
successive Fed rate increases since 1946)
Rate increase
7 days 22 days
126 days 252 days
First
-0.57% 0.76%
3.91% 9.87%
Second
0.05 0.96
3.93 6.45
Third
0.23 -0.36
3.46 -2.72
Fourth
0.33 1.95
-1.37 -2.79
Fifth
-1.44 -1.12
-5.38 -2.86
Sixth
0.13 -1.92
-5.20 -6.98
Source: Leuthold Group
December 31, 2007
- Dow Jones Industrial Average closed at 13,264.82, an annual increase
of 6.43% (vs. 16.29% jump in 2006;
6.3% down from all-time high
October 2007); S&P
500 index (companies with median market value of $12.8 billion)
closed at 1468.36, an annual gain of 3.53%, up 10% excluding financial
stocks (6.2% below record close on October 9, 2007; down 3.8% in
fourth quarter, first for any fourth quarter in seven years; up 67%
since 2002; first November/December decline since 1974); Russell 2000 closed at 766.03, down 2.8% in 2007 (first
loss in five years, underperformed S&P 500 for first time since 1998);
Nasdaq closed at 2652.28, up 9.81% for the year (down
7.2% from record high in October 2007);
Dow Jones Wilshire 5000 Index (companies with median market value of
$589.6 million), broadest measure of U.S. shares, closed at 14,819.58
($115 billion decrease in value of stocks); Chicago Board Options
Exchange Volatility Index (VIX), market's ``fear gauge'' (rises
as stocks fall), closed at 22.50 (up 95% percent in 2007, biggest
annual rise in its 18-year history).

(source: Bloomberg Financial Markets)
January 2008 -
Peak to Trough Comparisons of Market Declines
(http://graphics8.nytimes.com/images/2008/01/18/business/0118-biz-STOX-full.jpg)
L-R: 1/1/73-12/6/74
(-45.1%); 11/29/83-7/24/84 (-15.6%); 8/25/87-10/19/87
(-36.1%); 7/16/90-10/11/90 (-21.2%); 7/17/98-8/31/98
(-19.3%); 1/14/00-10/9/02 (-37.8%); 10/9/07-1/17/08
(-14.2%).
January 17, 2008
- NYSE Euronext agreed to acquire American Stock Exchange for $260
million to increase its business in options, exchange-traded funds, cash
products.
January 25, 2008 - Biggest
Trading Losses by 'Rogue Traders'
(http://graphics8.nytimes.com/images/2008/01/25/business/20080125_BANK.jpg)
(source: Bloomberg;
http://graphics8.nytimes.com/images/2008/03/29/business/29-biz-CHARTS-full.jpg)
March 31,
2008 - London’s
FTSE 100
index closed at 5702.1, off 11.9 per cent for the first three months of
the year = the index’s worst opening quarter since it was launched 24
years ago on January 3, 1984 (3Q 2000 -fell 20%); reasons -
subprime
crisis, slowing housing market (Building Society reported 5th
consecutive drop in housing prices), consumer confidence in the UK is at
its lowest for 15 years (data from pollsters
GfK/NOP
showed the confidence worsened for a seventh month in a row, lowest
level since 1993).
June 30, 2008
- End of 2nd
Q 2008:
Standard & Poor’s 500-stock index down 8.6% in June 2008, down 12.8% for
the first half of 2008 = worst performance in June
since 1930 (down 16.5%). Index
introduced March 1, 1957 (with daily) estimates (predecessor stock
market indicator - Standard Statistics Company Average of Stock Prices
developed in 1926 = 100); Dow Jones industrial average off 14.4% for the
first half of 2008.
August 2, 2008 - Half of
consumers polled by Conference Board expect stock prices to decline over
next 12 months (first time); 6 previous cycles when at least 36% of
those responding were bearish.

(http://graphics8.nytimes.com/images/2008/08/02/business/0802-biz-CHARTSweb.gif)
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stock market activity; monetary policy responses of
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____________________________________________________________
Business History Links
The Big Picture
http://bigpicture.typepad.com/
Macro perspective on capital markets. the economy, geopolitics,
technology and digital media by Barry L. Ritholtz, CEO and Director of
Equity Research at FuisonIQ, an online quantitative research firm
(former Chief Market Strategist for Maxim Group, New York Investment
bank).
Center for Research in Securities Prices (CRSP)
http://www.crsp.chicagogsb.edu/
CRSP is dedicated in its goal to provide the most complete, accurate,
and easily usable securities data to all of its users. 1959
- Louis Engel, vice president at the firm then known as Merrill Lynch,
Pierce, Fenner & Smith, inquired of Professor James H. Lorie (Ph.D.
1947; Associate Dean 1956; Professor of Business Administration at
University of Chicago Graduate School of Business) as to whether
investment performance in the stock market relative to other types of
investments had been analyzed. Such an analysis was not feasible as no
comprehensive stock market database was available at the time. Professor
Lorie proposed that Merrill Lynch provide funds for a project with the
purpose of constructing the stock database. The work would involve
gathering, cleaning, and including the prices, dividends, and rates of
return of all stocks listed and trading on the NYSE since 1926. The work
would also include calculating rates of returns for those same stocks.
1960 - CRSP, with a grant of $300,000 from Merrill Lynch,
was established; 1964 - the stock market database was
estimated to contain between two and three million pieces of
information; 1984 - added data from the NASDAQ markets
(from December 1972); mid 1990s - created the only
complete database available containing active and inactive mutual funds;
2005 - released the CRSP/Ziman Real Estate Data Series
together with the Ziman Center at the Anderson School of Business
(UCLA); 2006 - released Pre62 database, which contains
daily data from 1926 - 1962 (previously only monthly data was available
for this time period).
Daily Closings of the Dow Jones Industrial Average (DJIA)
http://eh.net/hmit/dow
Data cover period from DJIA inception, on May 26, 1896, to the present.
Charles Dow, the History of the Dow Jones Averages, Dow Jones
Averages Chronology 1884 - 1995
http://www.cftech.com/BrainBank/FINANCE/DowJonesAvgsHist.html
Dow Jones Indexes
http://indexes.dowjones.com/mdsidx/
Dow Jones Indexes develops, maintains and licenses market indexes for
investment products. Among its more than 3,000 indexes are the world's
best known stock indicator, the Dow Jones Industrial Average, and the
leading pan-European indexes, the Dow Jones STOXX Indexes. Dow Jones
Indexes is an independent, full-service index provider, supplying
accurate, reliable and transparent index data. The indexes are
maintained according to a clear, transparent and systematic methodology
that is fully integrated across all Dow Jones equity index families.
This methodology, together with historical data for all Dow Jones
indexes, is open for review and is made available at no cost to the
professional investment community.
Dow Jones Interactive Learning Center
http://www.djindexes.com/DJIA110/learning-center/
The Dow Jones Industrial Average is considered to be an effective gauge
of the U.S. economy, and overall investor sentiment. For those who keep
close track of the Dow, it is something to be watched ever so closely.
This website serves as a place to learn about the Dow in all its glory,
ranging from pieces of trivia to a nice historical timeline. It’s
probably best to start with the historical timeline. Here users will
learn about what happened to the twelve original companies listed on the
Dow when it first debuted on May 26, 1896. After that, they are free to
move through the rest of the timeline, learning about the technological
innovations that the Dow embraced over time, and also about some of the
darkest days it has encountered. The trivia section is a true treat, as
visitors can learn how much they would have today if their parents had
invested $1,000 on the date of their birth, and then also find out about
some of the Dow’s top performers over the past century or so.
Securities Industry Association
http://www.sia.com/
Established in 1972 through the merger of the Association of Stock
Exchange Firms (1913) and the Investment Banker's Association (1912).
SIA brings together the shared interests of more than 600 securities
firms to accomplish common goals. According to the Bureau of Labor
Statistics, the U.S. securities industry employs more than 800,000
individuals. Industry personnel manage the accounts of nearly 93-million
investors directly and indirectly through corporate, thrift, and pension
plans. In 2003, the industry is projected to generate $142 billion in
domestic revenue and $283 billion in global revenues. |