After the February 1966 record, the Dow fell 37 percent over about four years. It bottomed out on May 26, 1970, in the middle of a recession, at 631.16.
â¿¿RECORD BREAKER: Nov. 10, 1972. The Dow breaks the record that had stood since 1966, closing at 995.26.
â¿¿RISE CONTINUES: It keeps rising for two months, gains 6 percent and peaks at 1,051.70 on Jan. 11, 1973.
A new bull market began in May 1970, and the Dow rose 58 percent in two and a half years. By late 1972, cease-fire talks were under way for Vietnam, and investors were hopeful that the U.S. would soon pull out. Inflation had cooled to about 3 percent. Richard Nixon had just been re-elected in a landslide a few days before, beating George McGovern in every state but Massachusetts as well as D.C.
The New York Times captured the gleeful mood as the market approached its next goal post. "Tapewatchers around the nation," the newspaper wrote, describing the Nov. 10, 1972, record day, "rooted with the zest of football fans." Four days later, the index closed above 1,000 for the first time.
But the celebrations were short-lived. The Dow topped out two months later, on Jan. 11, 1973, at 1,051.70. The crisis in Vietnam continued, inflation took off again, and oil prices soared that fall, triggered by an embargo against the U.S.
By Dec. 6, 1974, the country was stuck in recession and the Dow was down to 577.60, 45 percent below the record it had set the year before.
â¿¿ RECORD BREAKER: Nov. 3, 1982. The Dow breaks the record held since 1973, closing at 1,065.49.
â¿¿ RISE CONTINUES: It keeps rising for almost five years, gains 156 percent and peaks at 2,722.42 on August 25, 1987.
The Dow had to struggle to break the 1973 record. A severe recession hit in the mid '70s and New York City veered near bankruptcy. Jimmy Carter, running for president in 1976, summarized the state of the economy by emphasizing the "misery index" â¿¿ the inflation rate plus the unemployment rate. By 1980, things had yet to improve, and Carter lost his re-election bid. (Inflation was at nearly 13 percent in November 1980, when Ronald Reagan won the White House.)