This Day In Market History: Dow Gains 9.5% On Great Depression Optimism

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened?

On this day 86 years ago, the Dow gained 9.5 percent after General Motors Company GM declared a 25-cent dividend.

Where The Market Was

The Dow Jones Industrial Average closed at 58.22 and the S&P 500 traded at 7.53. Today, the Dow is trading at 25,326.16 and the S&P 500 is trading at 2,827.22.

What Else Was Going On In The World?

In 1932, the Great Depression sent the U.S. unemployment rate soaring to 24.5 percent. The British Broadcasting Company launched its first public television programming featuring performances by dancers, musicians and other performers. A gallon of gasoline cost 10 cents.

GM Gives Investors False Hope

On Aug. 3, 1932, GM declared a 25-cent dividend and wheat prices gained 5 percent on the day. The Dow gained 9.5 percent, its fourth-best single-day performance in history at the time. Over the previous month, the Dow had gained 31.1 percent, the stock market’s first signs of life since the 1929 crash.

The summer of 1932 gave investors a renewed sense of optimism that the worst part of the Great Depression was over, and newspapers began writing stories about the beginning of the “new bull market” in stocks.

Over the next five years, the Dow would more than triple in value, gaining another 219.3 percent. To this day, Aug. 3, 1928 represents the ninth-largest single-day gain for the Dow since 1896.

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Public domain photo via Wikimedia.