Biggest Stock Market Crashes

Crushing stocks is the Corona Virus epidemic and the concern that it could turn into a pandemic. In what it is the worst week for stocks since 2008 financial crisis, the Dow Jones dropped 1800 points back-to-back days, causing many to wonder if this could turn into a full-on stock market crash.A stock market crash happens when a high-profile market index, such as the S&P 500 or the Industrial index of Dow Jones, bottoms out as investors turn from buyers into sellers in a moment.Any trading day which stocks tanked by 15% or more is considered a market crash, and traditionally they occur in a fairly frequent basis.Historian disagree in quantifying the actual number of stock market crashes throughout the history, but there have been major stock market declines in the United States with the stock market losing more than 10% of its value.Historically, reports of stock market crashes date back to the year 1634, when the first speculative bubble caused the first market crash on Dutch Tulips, When prices Tulip prices rose 2000% before crashing back down in 1637.After it was first imported into Europe from the Ottoman Empire (Turkey), the Tulip's unusual, exotic beauty created high demand among the Dutch elite, who saw the plant as a symbol of status.Throughout the beginning of September and the end of October 1929, the stock market suffered a significant decline of 40% drop. The fall continued until in the summer of 1932 the market hit rock bottom, when it was nearly 90% down from its former peak in early 1929.But the market and it's investors had been flying high before that terrible crash. After the triumphant advent of World War 1, Americans were full of trust and hope, and assumed the stock market would make everyone rich in filth.They saw no harm, and were not worried about an inconvenience. And they poured all their money into the market with no questions. Most of them just didn't really know how the economy worked at all.Many unscrupulous swindlers took advantage of their optimism, and they joined forces by exchanging shares among-st themselves to manipulate stock prices. They made it look like the prices were rising dramatically, a colorfully known practice called ''painting the tape'' which promoted investors to buy, while swindlers sold for artificially inflated prices and made huge profits.In fact, the Dow Jones Industrial Average Index soared to 395.50, a height that would not be reached again until 1954, just two weeks before the bottom fell out. The Dow Jones declined steadily after that point, and the rate of fall started to sharpen.The Dow Jones had tanked to 340.65 by Wednesday, October 23, 1929, with 7.4 million shares traded. It opened the next day with small rally. A wave of selling has followed the boom, with 14.8 millions shares traded. The Wall Street offices couldn't keep up with that trading volume, and so details lagged far behind the day's activity. The Dow Jones opened big, fall and closed 15% when the market opened the next Monday morning.The market was flooded with sell orders as the opening bell rang on Tuesday 29th October. Soon prices fell under that pressure. 4.4 millions shares had changed hand in the first thirty minutes of trading. Everybody wanted to sell, welcome any offers they might have to close their position.Damaging losses had been severe, and Dow Jones fall to a devastating 211.35 low. Trading volume on that single day, now known as Black Tuesday, hit record 17.5 millions shares.The panic selling finally stopped, but stock prices continued to fall. And although some ups and downs still occurred, the resulting bear market latest through 1932, a year during which the Dow Jones never reported a gain.It was the biggest drop in history on a single day. The American stock market lost $600 billion on October 19, 1987, now known as Black Monday, and the Dow Jones experienced a 26.5% loss in single trading session.The sharp decline over the first half of the year came on the heels of rising stocks, prompting some conservative analysts to warn of a bubble effect.Now with standing the Securities and Exchange Commission (SEC) valiant efforts, investors - even large institutional investors - wouldn't listen to reasoning. Investors were intrigued by the excitement of hostile takeovers and IPOs, and stock prices tanked to heights undreamed of levels.The economic outlook started to look grim by mid-October the currency was down, and the United States had a large trade deficit. Investors responded to the dreary news, and on a daily basis the market started to see losses. The Dow Jones reported a 6.5% loss at the closing basis on Friday October 16, and investors became even more anxious.By the time the U.S. markets opened the next Monday morning, similar declines had occurred to the rest of the world, especially in the Asian Markets. When the opening bell rang that day on the NYSE, the Dow immediately began its descent, eventually slipping down 515 Points.That followed the dark day was district from the continuing economic troubles of the 1929 crash. The economy hasn't fallen into a recession, bank have not crashed. And the market made a quick recovery, gaining about half of their losses from Black Monday in just a few trading sessions. It would actually take the Dow Jones only two short years to surpass its pre-crash peak.Many stock market happen in lightning fashion, just like the 1987 stock market crash that saw the market losing 27% in a single trading day. Many crashes take longer, as losses from repeated trading sessions stack up.That was again at the forefront and core in this case, as investors interest in internet stocks boomed in the 1990s, and as "new economy" companies like Pets.com, Webvan.com, GeoCities.com saw prices grow dramatically.The Great Recession is a term describing the sharp decline in economic activity over the late 2000s. The most important downturn since the Great Depression is considered for this era. The word Great Recession refers both to the US recession, which will officially last form December 2007 to June 2009, and to the subsequent global recession of 2009.As the US housing market went from boom to burst, the economic slumps began, and large amounts of mortgage-backed securities (MBS) and derivatives lost significant value.Lehman Brothers filed for bankruptcy on September 15, 2008. That name may bring up images that millions of peoples saw in the news for the first time; hundreds of employees, mostly dressed in business suits leaving one-by-one global bank offices with bankers' boxes with their hands. It was a sombre reminder that nothing is forever - even in the riches of world of finance and investment.With $639 billion in assets and $619 billion in debt, Lehman's bankruptcy filling was the largest in history, since its assets far exceeded those of previous bankrupt giants like WorldCom and Enron. At the time of its collapse Lehman Brothers was the fourth largest U.S. investment bank with 25,000 employees worldwide.Lehman Brothers downfall has made it the biggest casualty of the 2008 U.S. financial crisis by subprime mortgage that swept through global financial markets. The collapse of Lehman Brothers was a seminal event that greatly intensified the 2008 crisis and contributed to the erosion of nearly $10 trillion in global equity market capitalization in October 2008 - the biggest decline recorded at the time.Although the direct cause of this momentary collapse remained unclear for years, the 2010 flash crash was marked by a 600-point drop in in the Dow Jones and a dramatic one day plunge in S&P 500, a 7% decline that occurred on May 6 afternoon in under 15 minutes.The fast drop was balanced by a recovery that was similarly swift, leaving investors and regulators puzzled. Exchange cancelled more than 20,000 trades that took place during the decline in kneejerk reaction, all transactions executed at unusually low rates.At first, market regulators thought the brief flash crash was caused by a typo; that somebody had mistakenly typed in order. This proved to be false. A report released almost 2 weeks later included a number number of hypotheses, but no primary cause was ever set out. The flash crash was largely caused in part by steep declines in specific stocks, including Philip Morris, Procter & Gamble, And Accenture.Approximately a month later, on 10 June 2010, the SEC formally adopted rules to ensure that such an unsettling occurrence could not reoccur. The new rules must immediately suspend trading for ant S&P 500 stock if its share price declines in 5 minutes by more than 10%.In April 2015, US authorities arrested Navinder Sarao, a native of London, in connection with the 2010 flash crash. Sarao has been charged with 22 crimes including bribery for his alleged role in the manipulation of the market.Sarao has used an automated trading system according to the FBI to pretend to place orders, "spoofing" the market. The case is still unresolved as of may 2016 and Sarao insists that he did not intentionally cause the flash crash.Investors woke up to market chaos on August 24, 2015, as the S&P 500 plunged nearly 150 points, a 5.5% drop within minutes of the opening bell. The week before, this flash crash followed a trend toward selloffs, ensuring investors would have a weekend to become even more anxious.So when on Monday morning, the Shanghai Stock Exchange Composite Index (SHCOMP) tanked more than 8%, American traders rushed to sell - but no one was buying, and some stocks (shares trading on major exchanges) had literally had no ready market.Liquidity improved as more investors and traders trickled into the market. The S&P 500 regained some of its loss throughout the day, but still closed by over 3%.* The stock market crash 1929 was one of the worst declines U.S. history.* March 1929: The Dow declined but the investors were convinced by the bankers.* 8 August: New York's Federal Reserve Bank increased the discount rate to 6%.* 3 September: Dow Jones hit its peak at 381.17. This was an improvement of 27% over the height of the previous years.* 26 September: Bank of England has also increased the gold standard security threshold of the previous years.* 29 September: The Hatry Case triggered chaos on British Market.* 3 October: Exchequer Chancellor Edward Snowden of Great Britain called the U.S. stock market a "speculative orgy."* 4 October: The New York Times and the Wall Street Journal agreed with Snowden.* 24 October: Black Thursday.* 28 October: Black Monday.* 29 October: Black Tuesday.* 1933: Federal Deposit Insurance Corporation was introduced by President Roosevelt to protect bank deposits. After stock market crash, the bank only had enough for every dollar to respect 10 cents. That is because, without their knowledge, they had used the saving of their depositors to buying stocks.Investors are caught up in panic selling when stock prices start to fall rapidly. During stock market crash a panic can be focuses on one company or industry, or hit the market whole depending on investor confidence and sentiment.Investors are only getting out during stock market crash, no matter how little money they might get for their shares. We trade not on details but on emotion. In the worst cases, stock market crash result in panic selloffs.During stock market crash occurs when a major nosedive is taken for the overall value of stock market. This also occurs when a bubble collapses and, at the same time, most stock holders quickly want to selloffs their shares. If more people want to sell than buy. There is a dramatic drop in prices and investors tend to incur huge loss.