Looking Back at the Major Highlights of Last 12 Months
JANUARY
Stocks start off the year by soaring. The Dow Jones industrial average passes 2,000 and 2,100 and throughout the year sets records with ease.
The United States slaps tariffs on wine, cheese and other products from the European Community, but the trade dispute is settled by month’s end.
BankAmerica turns down First Interstate’s takeover bid. A month later, First Interstate abandons the fight, saying asset sales made B of A less attractive.
Ted Turner will sell 35% of Turner Broadcasting to a group of cable TV companies for $550 million. FEBRUARY
Charles Schwab will buy back his discount brokerage from BankAmerica. The company goes public in September.
The insider trading scandal widens with the arrest of prominent Wall Street figures: Robert M. Freeman of Goldman Sachs, Richard B. Wigton of Kidder Peabody, Timothy L. Tabor, formerly of Kidder and Merrill Lynch, and Martin A. Siegel of Drexel Burnham Lambert, formerly of Kidder. The first three plead not guilty in April; charges against them are dropped in May but prosecutors say the cases against them aren’t over. Siegel pleads guilty.
Seven industrialized nations hammer out the “Louvre Agreement” to stabilize the falling dollar.
Security Pacific will acquire Ranier Bancorporation in a $1.15-billion stock swap.
Kaiser Steel files for bankruptcy protection and later puts most assets up for sale. MARCH
National Amusements will buy Viacom International, which operates MTV, Showtime and other media properties, for $3.4 billion in cash and stock.
Chrysler will buy American Motors, including its Jeep operations, for $2 billion. Later, Chrysler buys Lamborghini.
Los Angeles brokerage chief Boyd L. Jefferies agrees to plead guilty to criminal charges that he illegally “parked” stock for speculator Ivan F. Boesky.
After fierce opposition from the U.S. government, Fujitsu drops its plan to acquire Fairchild Semiconductor. Fairchild is later bought by National Semiconductor.
British Petroleum says it will buy the 45% of Standard Oil that it doesn’t already own; the price is later set at $7.82 billion.
The U.S. government causes a furor by imposing import tariffs on certain Japanese products in retaliation against trade barriers and “dumping” of computer chips.
Conrail goes public with a $1.65-billion stock sale, the biggest initial public offering ever in the United States. APRIL
Major banks raise the prime rate to 7.75% from 7.5%, the first such increase in three years. The rate is destined to go higher. Bond prices tumble, causing Wall Street firms heavy losses.
IBM introduces a new generation of personal computers, called System 2, hoping to fend off “clone” machines.
Rupert Murdoch will buy Harper & Row for $300 million.
Texaco files for Chapter 11 bankruptcy protection after a court orders it to post a $12-billion bond while appealing Pennzoil’s challenge to its purchase of Getty Oil. After off-and-on talks, further appeals and the intervention of Carl C. Icahn, Texaco and Pennzoil settle the dispute in December for $3 billion. But Texaco remains to emerge from Chapter 11. MAY
JMB Realty will buy Canadian real estate developer Cadillac Fairview for $2 billion.
Citicorp adds $3 billion to its loan-loss reserves to cover questionable Brazilian and other foreign loans. Other large banks soon follow.
First Interstate agrees to buy Allied Bancshares of Houston. JUNE
Paul A. Volcker will retire as chairman of the Federal Reserve after eight years at the helm. Economist Alan S. Greenspan is his successor.
The Rev. Leon Sullivan, author of the Sullivan Principles, urges U.S. business to cut all ties with South Africa. Citibank and Ford, among other firms, soon decide to divest their operations there.
The parent of the J. Walter Thompson advertising agency is acquired by WPP Group of Britain for $566 million.
Setting off a major controversy, the Pentagon suspends doing business with Toshiba Corp., saying that a subsidiary sold restricted technology to the Soviets.
Under increasing pressure, Allegis agrees to be broken up. Chairman Richard J. Ferris resigns, and the company’s United Airlines, Hertz and Westin units will be sold separately.
Law professor David S. Ruder is named to head the Securities and Exchange Commission.
Financially ailing Lorimar Telepictures decides to sell its advertising agencies, TV stations and publishing businesses. JULY
The goverment derails the merger of the Santa Fe and the Southern Pacific railroads, ordering their parent to sell one of them. By late December, there is a pact to sell the Southern Pacific to Rio Grande Industries for $1.8 billion.
ZZZZ Best, the Southern California carpet-cleaning firm founded by “whiz kid” Barry J. Minkow, files for Chapter 11 bankruptcy protection.
Telecommunications giants Comsat and Contel cancel a proposed $2.1-billion merger.
General Electric sells its GE and RCA consumer electronics businesses to Thomson of France for $800 million and Thomson’s medical equipment business.
A.H. Robins, in a plan to emerge from Chapter 11 bankruptcy, agrees to merge with Rorer Group in a $2.6-billion stock swap; the deal would set up a $1.75-billion fund for Dalkon Shield claims. Robins is later ordered by a federal judge to set aside $2.47 billion for claims. Two other bids emerge for Robins. AUGUST
Congress approves $10.8 billion for FSLIC in its struggle to deal with troubled savings and loans.
The historic bull market in stocks celebrates its fifth anniversary. The Dow peaks at 2,722.42 on Aug. 25.
A firm led by former Wall Street lawyer Reginald F. Lewis will buy Beatrice Cos.’ international foods division for $985 million, creating by far the nation’s largest black-owned business.
Carter Hawley Hale Stores is split into a department store firm and a separately traded specialty store company called Neiman-Marcus Group.
Cray cancels a supercomputer project, and the machine’s designer quits the company.
A federal court rules that warning labels protect tobacco companies from many product-liability suits. SEPTEMBER
In its first major action under Chairman Greenspan, the Federal Reserve raises its discount rate to 6% from 5.5%. Major banks promptly raise the prime rate.
First City Bancorporation of Houston is rescued by the FDIC in a $970-million bailout.
Ford agrees to a new contract with its 104,000 UAW workers, who get improved protection against layoffs. OCTOBER
Avis is sold to its employees for $1.75 billion.
Ailing BankAmerica gets a $250-million cash infusion from Japanese investors.
A. H. Ahmanson, parent of Home Savings of America, buys Bowery Saving of New York.
The Crash of ‘87: The stock market collapses on Oct. 19. The Dow plunges 508 points as more than 604 million shares change hands. A rally follows in the next two days but doesn’t last. Investors of all types are shell-shocked and bloodied by losses. In an atmosphere of crisis and unprecedented market volatility, the major exchanges temporarily curtail trading sessions by two hours a day and impose restrictions on program trading. Stock exchanges around the world are caught up in the turmoil; the Hong Kong exchange closes for a week. The Fed moves to supply money to the U.S. banking system, and interest rates fall. Brokerage firms suffer big trading losses and later announce huge layoffs. The crash raises fears of a recession, and Congress and the White House begins talks to cut the federal budget deficit. In December, the President signs two bills to cut the deficit by $76 billion over two years. The dollar continues its inexorable decline.
The British government proceeds with its $12.2-billion initial public offering of British Petroleum shares. NOVEMBER
Former Wall Street Journal reporter R. Foster Winans loses appeal to the Supreme Court of his fraud conviction.
Eastern Airlines says it will lay off 3,500.
CBS sells its records division to Sony for $2 billion.
The Mexican peso plunges on foreign exchange markets.
Volkswagen announces that it will close its Pennsylvania auto assembly plant. DECEMBER
Shearson Lehman Bros. agrees to buy E.F. Hutton Group for nearly $1 billion.
Safeway sells its 172 Southern California stores to Vons for $325 million plus 30% of Vons’ stock.
West Germany, France and other European nations cut interest rates to stimulate their sluggish economies.
The United States reports a record $17.6-billion trade deficit for October, sending the dollar to record lows in foreign exchange.
Toy maker Worlds of Wonder, a one-time high-flier, files for bankruptcy protection.
