Investors breathed a sigh of relief on this day in 1929. The Dow Jones Industrial Average
Street insiders took the rebound as an opportunity to belittle Babson's bearishness. One investment trust manager told The New York Times that the prices of "good" stocks would be higher than ever at the start of 1930. This unnamed manager voiced confidence in his trust's basket of railroads, utilities, industrial manufacturers, and banks. Others clucked that a temporary drop was to be expected, but the vast majority of investors the Times surveyed expected the Dow to end higher in six months, based on "continued prosperity."
On Sept. 6, 1929, despite two days of steep declines, Wall Street's brokers took out another $137 million in loans to buy stocks on margin, which would equal $1.8 billion today. Total loans outstanding exceeded $8 billion after the day's borrowing -- a monstrous sum at the time.
The broad rally on that day very nearly eliminated the previous day's losses. Radio Corporation, later RCA, gained nearly 10%, and General Motors
Allied Chemical, which had recently established itself as a leading global ammonia producer, gained nearly 4%. After a series of mergers, it is now part of industrial conglomerate Honeywell
Major national retailers Tobacco Products Corporation and the United Cigar Stores Company completed a merger today in 1929, forming the United Stores Corporation. Though its chain of mergers, breakups, sales, splits, and holding corporation changes became somewhat dizzying over time, this merged company was in fact an important corporate root of tobacco giant Philip Morris, now Altria
The U.S. Attorney General also shut down a pump-and-dump newsletter on this day in 1929. The owner was charged with mail fraud for running -- and I quote The New York Times on this -- a "financial speakeasy."
The gains of Sept. 6, 1929 wouldn't last. Stay tuned for more history of the Crash of 1929, as well as other notable events in the long history of the Dow Jones Industrial Average. If you're looking for retail stocks that can adapt to changing times like Altria, the Fool has three suggestions. Get the inside scoop on these great long-term opportunities in our brand-new exclusive free report.
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