This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

So The Dow Hit A Record; Now Where Do We Go?

In August 1982, another bull market began. By November of that year, the Dow finally beat the 1973 record. Reagan's tax cuts were taking effect. Over the next five years, unemployment and inflation fell, and the economy grew rapidly. Baby boomers were buying homes, raising kids and spending. In 1987, the Dow had 55 record-breaking days. Its last was August 25, when it peaked at 2,722.42

Things unraveled quickly after that. On Oct. 19, 1987, investors panicked over whether the recent stock gains were just a bubble, and the Dow plunged 23 percent to 1,738.74. The fall was so abysmal that it remains the index's biggest one-day percentage loss ever.

By the end of Black Monday, as it came to be known, the Dow was down 36 percent from the record it had set just two months before.

â¿¿RECORD BREAKER: August 24, 1989. The Dow breaks the record held since 1987, closing at 2,734.64.

â¿¿RISE CONTINUES: It keeps rising for almost a year, gains 10 percent and peaks at 2,999.75 on July 16, 1990.

The Dow recovered quickly from its Black Monday in 1987.

The Federal Reserve reassured investors by immediately cutting interest rates, a move meant to spur borrowing and lending, and declaring that it was ready "to support the economic and financial system." Reagan insisted the economy was fundamentally sound. Soon enough, investors began to think of the one-day panic as a sign of scared stock traders and unwieldy computer trading, rather than an indictment of the broader economy.

Through 1988 and 1989, the economy kept expanding and unemployment stayed low. On Aug. 24, 1989, the Dow was up 57 percent from its Black Monday disaster and broke its August 1987 record.

It kept rising for almost a year. In the summer of 1990, it came agonizingly close to a 3,000 close, ending at 2,999.75 on both July 16 and 17. On the second day, traders at the New York Stock Exchange tossed paper in the air in celebration at the end of the dayâ¿¿ then realized, when the final figures were tallied, that the celebration was premature.

4 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 16,472.37 +200.36 1.23%
S&P 500 1,951.36 +27.54 1.43%
NASDAQ 4,707.7750 +80.6910 1.74%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs