This article remembers key events that have shaped Wall Street history.
Germany invaded Poland on Sept. 1, 1939. The Dow Jones Industrial Average (INDEX: ^DJI ) gained nearly 10% on the first day of trading following the attack. It would be the Dow's last major surge of the year, as it peaked on Sept. 12, at 155.22 -- still 58% below the levels reached exactly one decade earlier.
The Washington Post reported on this day in 1939 that "bullish professionals again took hold in a manner reminiscent of 1929. … Many [stocks] were $1 to more than $4 above yesterday's final levels, some at new highs for more than a year."
The New York Times reported on a number of major moves, particularly that of the coal-carrying Norfolk & Western railroad -- now Norfolk Southern (NYSE: NSC ) -- which gained more than 10%. Other heavy-industry "war stocks" were also of particular interest, with steelmaker United States Steel (NYSE: X ) gaining about 5%. A U.S. Steel subsidiary reopened two blast furnaces and increased its employment rolls by more than 1,000 men in Chicago to handle increased wartime demands.
In one interesting parallel to modern times, General Motors (NYSE: GM ) chairman Alfred P. Sloan, Jr., noted that macroeconomic trends had long been working against his industry: "Since 1929, the rate of … motor vehicles in use has materially lessened -- being to an important degree the result of sharply lowered levels of national income characteristic of the past 10-year period. … In addition, the average age of cars in use has become greater, which means fewer replacement sales."
This warning was tempered by a promise that "as soon as our national policies permit the resumption of an upward trend in the national income, the automotive industry will enjoy … a degree of that prosperity."
Within two years, GM would claim 41% of the American auto market. The Dow bottomed out in April of 1942, having lost 40% of its value from the Sept. 12, 1939 close.
Several bank executives held a rather ridiculous meeting today in 1939 at the New York Fed. Led by a vice president of Chase -- now JPMorgan Chase (NYSE: JPM ) -- the meeting sought to resume collection on American banks' loans to Germany, which totaled about $65 million at the time had been interrupted for reasons that should be fairly obvious.
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