It has taken Wall Street considerable time to recover from crashes and for investors to regain their confidence and decide it was safe to put their money into stocks again. A look at how the Dow Jones industrial average recovered from its two best-known crashes, and how much it needs to recover from its latest plunge:
1987
The high: 2,722.42 on Aug. 25
The crash: Oct. 19, 1987, down 508 points to 1,738.34; that was a slide of 938 points, or 36.1 percent, since reaching the then- record close.
The recovery: It took more than 15 months for the Dow to get back to its pre-crash level and almost two years to the day — Aug. 24, 1989 — to reach a new closing high, 2,734.64.
1929
The high: 381.17 on Sept. 1
The crash: The Dow drifted downward after the peak. Although the date of Oct. 29, 1929, Black Tuesday, is probably best-known by the public, many market historians say the crash began Thursday, Oct. 24, and accelerated the following Monday and Tuesday. From its close of 305.85 on Oct. 23, the Dow tumbled 75.78, or 24.8 percent, by the time it ended at 230.07 on Black Tuesday. It continued its decline to a low of 198.69 on Nov. 13, giving it a drop of 107.16, or 35 percent. That also made for a drop of 182.48, or 47.9 percent from the September high. Stocks kept falling as the Great Depression wore on, and the Dow fell to 41.22 on July 8, 1932, giving it a loss of 339.95, or 89.2 percent from the September 1929 high.
The recovery: The Dow did not close above 305.85 again until April 1, 1954, more than 24 years after the crash, and it didn’t return to 381.17 until Nov. 23, 1954, a quarter century after Black Monday and Tuesday.
2008
The high: 14,165.43 on Oct. 9, 2007; the Dow drifted lower during the following year.
The crash: When Lehman Brothers collapsed Sept. 15, the Dow tumbled 504.48, the sixth-worst day in terms of points for the index. Since then, there have been three worse days — capped by a worst-ever 777.68 plunge on Sept. 29 and a 678.91 drop Friday, the anniversary of the Dow’s record peak. The average had fallen 5,713 points, or 40.3 percent. Since the Lehman Brothers bankruptcy, it fell 2,970, or 26 percent, from its close before the Sept. 15 collapse of Lehman Brothers, the event that triggered the freeze-up in the credit markets and that sent stocks plunging.
The recovery: With Monday’s advance of 936.42, the Dow is still nearly 4,778, or 33.7 percent, below its record-high close.
The Associated Press
