This Day In Market History: The Panic Of 1907
Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.
What Happened?
On this day in 1907, the Dow Jones Industrial Average dropped 8.3 percent, foreshadowing the Panic of 1907.
Where The Market Was
The Dow dropped 6.89 points to close at 76.23. The S&P 500 was trading at around 9. Today, the Dow is trading at 25,702 and the S&P 500 is trading at 2,810.
What Else Was Going On In The World?
In 1907, Oklahoma became the 46th U.S. state and Ford Motor Company (NYSE: F) began producing the Model R. The average U.S. worker earned between $200 and $400 per year.
A Dark Day On Wall Street
Almost exactly a century before the 2008 financial crisis that most investors remember all too well, there was another major crisis on Wall Street involving some of the nation’s largest banks. Much like the financial crisis of 2008, the end result was roughly a 50-percent decline in stock prices.
The Panic of 1907 was triggered by a lack of market liquidity, which resulted in market runs on several major banks resulting in the failing of the Knickerbocker Trust Company, New York’s third-largest trust.
Although the worst of the crisis didn’t take place until October 1907, stock market fundamentals began deteriorating as early as March. Railroad stocks led the March decline, dragging the Dow down 12 percent over a two-day period. At the time, the 8.3-percent one-day drop on March 14 was the second worst single day in the Dow’s history.
Related Links:
This Day In Market History: The Microsoft IPO
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Photo via Soerfm/Wikimedia.
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