Happy Birthday, Bull Market

The 1990 bear market died three years ago today--in a hail of falling stock prices.

The Dow Jones industrial average had peaked at 2,999.75 on July 17, 1990, just before Iraqi tanks rolled into Kuwait. Between then and Oct. 11, the Dow tumbled 634.65 points, or 21%, as the West prepared for war.

But Wall Street’s plunge reflected more than just Saddam Hussein’s ill-fated land grab. The Iraqi invasion had triggered the global recession that many Wall Streeters knew was inevitable after the debt buildup and real estate speculation of the ‘80s.

As quick as investors were to recognize the trouble that would come, they were even quicker to get over it: The Dow’s 1990 bear market lasted less than three months. The end came on Oct. 11 with a 42.82-point drop to 2,365.10, as oil soared past $40 a barrel.

No one knew for sure that the West would trounce Iraq four months later. But the market, as usual, didn’t wait for the actual event. The Dow rose 32.92 points on Oct. 12, and the first bull market of the ‘90s was born. Stocks haven’t taken a significant dip since. The bull’s gain so far: 1,220 points (52%) to 3,584.74 now.