Black Monday The title given to one of the most notorious days in recent financial history. On October 19, 1987, the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning of a global stock market decline. By the end of the month, most of the major exchanges had dropped more than 20%. Investopedia Says: Interestingly enough, the cause of the massive drop cannot be attributed to any single news event because no major news event was released on the weekend preceding the crash. While there are many theories that attempt to explain why the crash happened, no consensus argument can explain why Black Monday happened, but most agree that mass panic caused the crash to escalate.
Since Black Monday, there have been multiple mechanisms built into the market to prevent panic selling, such as trading curbs and circuit breakers. Related Terms: Calendar Effect Circuit Breaker Correction Dow Jones Industrial Average - DJIA Kondratiev Wave New York Stock Exchange - NYSE Trading Curb |