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This Day In Market History: Dow Hits 2,000

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This Day In Market History: Dow Hits 2,000

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

What Happened? On this day in 1987, the Dow Jones Industrial Average topped the 2,000 mark for the first time.

Where Was The Market? The S&P 500 was trading at 257.28.

What Else Was Going On In The World? In 1987, the popular television series “Full House” debuted. A pound of bacon cost $1.80, and a dozen eggs cost 65 cents.

Breaking 2,000: It took the Dow 14 years to double from 1,000 to 2,000, but it finally hit the mark on Jan. 8, 1987. The market was showing no signs of slowing down throughout most of 1987, hitting 2,722 by late August. At that point, the Dow had rallied more than 44% in under eight months, one of the hottest stretches in the index’s history.

However, the roaring bull market came to an abrupt halt on Oct. 19, 1987, when the Dow crashed 22.6% on so-called Black Monday.

By the end of 1987, traders and regulators had a much clearer picture of the power and danger of computerized trading. The 44% rally triggered a lot of skeptical traders to place computerized stop-loss sell orders in the event of a market downturn, and all of that automatic selling volume helped drive the extreme Black Monday sell-off.

By 1989, Wall Street regulators had implemented “circuit breakers,” temporary trading halts at certain thresholds intended to prevent the type of panic and lack of liquidity that occurred in 1987.

 

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