October 22, 1987: Another Day, Another Rout
The Dow falls at the open and trades 200 points lower at its worst point in the session. A recovery helps erase much of the loss, but the index still closes almost 80 points lower.
Psychology proves to be fragile. EF Hutton tells investors to cut stock holdings by 10%. More prime rate cuts and more talk of a budget deal soften the blow. Meanwhile, the price of a seat on the NYSE sells for $760,000, down from $1 million a week before. Another flood of buy and sell orders taxes the system and the NYSE says it will close early in the days ahead. The President announces the formation of a special commission to study the crash. (Part 1) [04:45] |
Computer program trading, then a relatively new force in the market, is deemed a villain in Washington and Wall Street. In his commentary, John Chancellor describes the computer programs as "mindless." Some say the market meltdown would have been worse if the NYSE had not taken steps to curtail computer trading in the days after the crash. (Part 2) [01:55] |