Market Watch : Wall Street Usually Immune to Crises
Wall Street has generally been unmoved by social strife. Even some greater shocks--including presidential assassinations--haven’t had the long-lasting effects on the market that some investors might have expected.
Here’s a look at how stocks responded to some major national crises of the past two decades:
* The Kennedy assassination: The death of President John F. Kennedy on Friday, Nov. 22, 1963, brought the Dow Jones industrial average crashing down 2.9%, or 21.16 points, to 711.49. An equivalent loss today, with the Dow at 3,336.09, would be 97 points.
Yet when the market reopened the following Tuesday, the Dow leaped 32.03 points to 743.52, a 4.5% surge that reflected investors’ faith in the new President, Lyndon B. Johnson.
* The 1965 Watts riots: Los Angeles’ pain from Aug. 11-17 was no concern of Wall Street’s, despite fears that the violence might spread to other cities. The Dow advanced every day of the crisis, rising from 881.47 to 894.26, a 1.5% gain.
* The 1968 riots: From April 4-11 of that turbulent year, the nation’s major cities were torn apart by race riots sparked by the assassination of the Rev. Martin Luther King Jr. Property damage and casualties were heavy in New York, Chicago, Washington and Pittsburgh, among other cities.
Yet the stock market was in the midst of a strong upward move and failed to be deterred by the crisis. The Dow climbed from 869.11 on April 3 to 910.19 on April 15, a 41-point, 4.7% surge. That would be equivalent to a 157-point Dow move today.
* The Kent State killings in 1970: The deaths of four students at the hands of Ohio National Guardsmen on May 4 of that year--during a protest against the Vietnam War--shocked a market already reeling from economic recession. The Dow closed at 714.56 on that day, off 19.07 points or 2.6%.
But within three weeks of May 4, the Dow reached its low for that year, at 631.16. It then rallied to end 1970 at 838.92, a 33% gain from the low.
* The Challenger explosion: The destruction of the space shuttle Challenger within seconds of its launch on Jan. 28, 1986, failed to shake Wall Street. The Dow closed at 1,556.42 that day, up 18.81 points. The index inched up another 2.52 points the following day.
