Stock Market Crash Of 1929

Dictionary Says

Definition of 'Stock Market Crash Of 1929'


A severe downturn in equity prices that occurred in October of 1929 in the United States, and which marked the end of the "Roaring Twenties." The crash of 1929 did not occur in one day, but was spread out over a two-week period beginning in mid-October.

The first portion of the crash occurred on October 24, a day known as Black Thursday. The following week brought Black Monday (Oct. 28) and Black Tuesday (Oct. 29) – the Dow Jones Industrial Average fell more than 20% over those two days. Pre-existing selling pressures and fear in the stock market were exasperated by a flood of sell orders that shut down the ticker-tape service that provided stock prices to traders. With key information missing from the markets, selling intensified even further.

Despite a few attempts at recovery, the stock market continued to languish, eventually falling almost 90% from its peak in 1929.



Investopedia Says

Investopedia explains 'Stock Market Crash Of 1929'


The lead-up to October 1929 saw equity prices rise to all-time high multiples of more than 30 times earnings, and the benchmark Dow Jones Industrial Average (DJIA) had risen 500% in just five years! This type of hyper-growth has shown itself to be unsustainable over time, as markets generally perform their best when they can grow steadily.

It took over 25 years for the DJIA to get back to the highs of the 1929 market, as the U.S. economy suffered through what we now call the Great Depression. Major new legislative and regulatory changes were enacted following the speculative bubble and crash of the 1920s in an effort to prevent the same situation from happening again.

comments powered by Disqus
Hot Definitions
  1. Closed-End Fund

    A closed-end fund is a publicly traded investment company that raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange.
  2. Payday Loan

    A type of short-term borrowing where an individual borrows a small amount at a very high rate of interest. The borrower typically writes a post-dated personal check in the amount they wish to borrow plus a fee in exchange for cash.
  3. Securitization

    The process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors.
  4. Economic Forecasting

    The process of attempting to predict the future condition of the economy. This involves the use of statistical models utilizing variables sometimes called indicators.
  5. Chicago Mercantile Exchange - CME

    The world's second-largest exchange for futures and options on futures and the largest in the U.S. Trading involves mostly futures on interest rates, currency, equities, stock indices and agricultural products.
  6. Private Equity

    Equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity.
Trading Center