The Dow Jones Industrial Average
A broad decline hit at the end of the trading day on Sept. 5, 1929. United States Steel
The New York Times then noted that total stockbrokers' loans totaled $7.9 billion. At the time, this represented nearly 8% of the country's GDP. One stock exchange sought to calm investor fears with a reassuring telegram to all members, which was reprinted in the Times. It read:
We would not be stampeded into selling stocks because of a gratuitous forecast of a bad break in the market by a statistician. The market has been advancing for three years, in spite of the bearish utterances of such authorities. No sane man expects widespread advances to continue indefinitely.
The market itself will furnish the best clue as to its future course, and will give warning of its culmination in plenty of time for the average trader to protect himself if necessary; but it seems to us idle to cite as a bearish factor the circumstance that the market does not act as a unit. It never has acted as a unit since 1924 and it never will again, because with 2,000 issues creating turnovers daily of 5 million shares, the rules and habits of speculation that govern a 400,000-share day with 300 active stocks no longer apply. Money will check speculation some time in the future and nothing else will. It is anyone's guess as to when this will happen.
The warnings of this statistician consumed market commentary on this day in 1929. With many automatic trades triggered by inexplicable declines, he became a lightning rod, an oracle "whose utterances appeared to have put fear into the hearts of timid holders of stocks."
The declines were just beginning. Stay tuned for more history from the Crash of 1929 and other notable events in the long history of the Dow Jones Industrial Average. If you're looking for a stock that's outlived the Dow and can survive any crash, take a look at the Fool's report on "The Only Big Bank Built to Last." It's fun, it's informative, and it's free -- click here to find out more.