by Chuck Mikolajczak Featuring Commentary by Peter Kenny, Art Hogan, Peter Costa, and Ted Weisberg and many other Wall Street veterans who were there.
NEW YORK (Reuters) – Thirty years ago, before heading to work at the New York Stock Exchange, Peter Kenny left his home in lower Manhattan and made a detour to the nearby Our Lady of Victory church to pray to St. Jude, the Roman Catholic patron saint of desperate and lost causes.
The reason was the stock market crash known as “Black Monday” on October 19, 1987.
“Blessed mother get me through this,” he prayed.
Kenny, now senior market strategist at Global Markets Advisory Group in New York, was a newly minted member of the New York Stock Exchange, having joined the exchange in February that year. He was stunned by the events that unfolded the previous day, the worst trading day in U.S. history.
“I don’t think anyone was prepared for what actually transpired in the overseas markets, which led to the bloodbath on Monday,” said Kenny.
When it was over, the Dow Jones Industrial Average. DJI had lost 22.6 percent in one day, equivalent to a drop of about 5,200 points in the index today. The benchmark U.S. S&P 500 index. SPX plunged 20.5 percent on Black Monday, equal to a drop of over 520 points today, and the Nasdaq dropped 11.4 percent, comparable to a drop of about 750 points.
In 1987 U.S. stock prices had climbed steadily all year, as they have in 2017, with each of the three major U.S. indexes hitting record highs in late August. But September turned into a difficult month, with each index falling more than 2.0 percent, though not by enough to raise alarm bells among investors.
But as the calendar flipped to October, the selling in U.S. equity markets intensified. The Dow Jones Industrial Average. DJI and S&P 500. SPX fell more than 9.0 percent in the week before Black Monday.
On the morning of Monday, October 19, 1987, Art Hogan, then a floor broker at the Boston Stock Exchange, expected a possible rebound for stock prices. Nothing had prepared him for what was to unfold.
“It was clear in that first hour… this was going to be as bad as we’ve seen in our lifetimes,” said Hogan, now chief market strategist at Wunderlich Securities in New York.
More on Reuters:
Click here to read further on the aftermath and lessons learned on that historic week in the market day from Ken Polcari, Gordon Charlop, and Larry Tab