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Black Monday 1987 Stock Market Crash

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Black Monday 1987 Definition Glossary of Stock Market Terms - Black Monday 1987

Black Monday 1987 : The term "Black Monday" generally refers to the Monday on October 19, 1987 when the Dow Jones Industrial Average lost 22.6% and similar stock markets around the world dropped enormous percentages, too, making it one of the largest percentage declines to occur in the stock market for a single day.
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Some of the international stock losses included Hong Kong that lost 45.8%, Australia lost 41.8%, Spain lost 31% and the stock market in the UK lost 26.4%. Consumer pessimism caused the market to drop to it's lowest point on October 20. Although no clear reasons have been found for the events on Black Monday, some economic analysts attribute the crash to human rationality and problems with economic equilibrium.

Earlier in the year the Dow Jones Industrial Average in the United States of America hit an all-time high of 2722 points in August, a growth that may have resulted from slow, but steady economic growth and dropping inflation. But as the world moved into October of 1987, the Dow began to lose points, dropping steadily from October 14th through the 16th, potentially causing fear over the weekend before it reopened on October 19th.

Some analysts blamed program trading, a computerized way to trade stocks based on certain inputs. Although many blame the automated calculations of program trading for causing Black Monday, some economic analysts still believe that Black Monday was an inevitable outcome of an over-inflated stock market and could not have been attributed to program trading due to the international nature of the event.

Black Monday is considered the official beginning to the American recession of the late 1980s. Although it lasted for only a brief period, it was followed by another recession in 1990.

Also called : Black Swan Event, 87 Crash, Stock Market Plunge of 1987, and Black Tuesday in Australia and New Zealand because of the time zone differences.


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