Home » Headline
Posted on 6 April 2011 | 14,963 views

Flash Crash on May 29, 1962

While many on Wall Street think our latest flash crash in 2010 was a bit of an anomaly, the truth is this has happened before and it was on May 29, 1962. The Dow Jones Industrial Average fell 5.7% that day, down 34.95, the second-largest point decline then on record.

In 1961, stocks had risen 27%, with leading technology stocks like Texas Instruments and Polaroid trading at up to 115 times earnings, a run-up in the market that had led many investors into complacency.

Terrified investors unaccustomed to volatility saw blue chips like AT&T come down all day, International Business Machines Corp. which had closed the day before at $398.50, bottomed at $355 per share. Less than six months earlier, IBM had traded at $607.

The plunge in smaller stocks like Brunswick Corp. was even sharper, down 22.3% from its opening price.

The parallels between the two flash crashes have the same characteristics. In 1962, some orders were executed at prices substantially different from those which prevailed when the order was entered — similar to the 2010 flash crash. In 1962, high-frequency trading didn’t exist, but “specialists” did who were obligated to try to maintain a fair and orderly market for each stock on the floor of the exchange.

Even in the 1960’s, billions of dollars’ worth of trades were going astray every month, and the major stock exchanges had to close down on Wednesdays so brokers could get a midweek breather to catch up on processing delays. The problems the regulators sought to solve nearly a half-century ago are still with us today.

  • Facebook
  • Twitter
  • Delicious
  • LinkedIn
  • StumbleUpon
  • Technorati
  • Mixx
  • Pinterest
  • Google Plus
  • Reddit
  • BlinkList
  • Blogger
  • Tumblr
  • Digg


Tags: , , , , ,

Rate This Article!
1 Star2 Stars3 Stars4 Stars5 Stars (2 votes, average: 4.50 out of 5)
Loading...Loading...

2 Comments »

  • Cheap Airline Tickets said:


    I never realized this type of “Flash Crash” has happened before. It makes me wonder if the SEC looks at this stuff and really tries to prevent future occurrences.

  • Motel Cost Evaluation Vs Traditional Journey Look for Sites said:


    heу there and thanκ you for yοur infοrmation – I havе ԁefinitely pіcked uρ anything new
    from гight herе. I did however expertіse some tеchnical issuеs using this web site,
    sincе Ι exρerienceԁ tο reload the sіte a lot of times previous tο
    I could get it to load prοpеrly.
    Ι had been ωonderіng if your web hosting iѕ
    OK? Νоt that I’m complaining, but sluggish loading instances times will sometimes affect your placement in google and can damage your quality score if advertising and marketing with Adwords. Well I am adding this RSS to my email and could look out for much more of your respective intriguing content. Ensure that you update this again very soon.

    my web-site … Motel Cost Evaluation Vs Traditional Journey Look for Sites
    Motel Cost Evaluation Vs Traditional Journey Look for Sites recently posted..Motel Cost Evaluation Vs Traditional Journey Look for SitesMy Profile

Leave your response!

Add your comment below, or trackback from your own site. You can also subscribe to comments via RSS.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

This is a Gravatar-enabled weblog. To get your own globally-recognized-avatar, please register at Gravatar.

IMPORTANT! You need to solve the following simple math (so we know that you are a human) :-)

What is 8 + 5 ?
Please leave these two fields as-is:
CommentLuv badge

Incoming Search Terms!

1962 stock market crash, may 29 1962, stock market crash 1962, crash wall street, 29 mai 1962 wall street, why did the stock exchange collapse in 1962