What is Black Thursday
Black Thursday is the name given to Thursday, Oct. 24, 1929, when the Dow Jones Industrial Average plunged 11 percent at the open in very heavy volume, precipitating the Wall Street crash of 1929 and the subsequent Great Depression of the 1930s.
More recently, "Black Thursday" is also used to refer to the Thanksgiving holiday in the United States, as more retailers open on Thanksgiving evening in a bid to get an early start on the frenzied shopping of Black Friday.
BREAKING DOWN Black Thursday
Black Thursday and the consequent market crash of 1929 triggered a complete overhaul of market regulation of the U.S. securities industry. These events led to the promulgation of the Securities Act of 1933 and the Securities Exchange Act of 1934.
The shopping version of "Black Thursday" has led to growing resistance among employees of retailers, who complain that they are forced to leave Thanksgiving family dinners early in order to report to work on time. Many retailers are opening earlier on Black Thursday with every passing year in order to counter the increasing popularity of online sales.
What Happened on Black Thursday of 1929
Even before the New York Stock Exchange opened on that fateful Thursday in 1929, investors were already panicking. The Dow Jones Industrial Average had fallen 4.6 percent the day before. The Washington Post headline exclaimed, "Huge Selling Wave Creates Near-Panic as Stocks Collapse." When the market opened on Black Thursday at 305.85, it immediately fell 11 percent during intra-day trading.
The stock market had already fallen off nearly 20 percent since its record close (at the time) of 381.2 on September 3, 1929. Even worse, trading volume was 12.9 million shares – three times normal volume. The three leading banks at that time were Morgan Bank, Chase National Bank and National City Bank of New York. They bought stocks to restore confidence in the markets. The Dow recovered a bit, closing 2 percent down, at 299.47. On Friday, the Dow closed higher, at 301.22. Howeve, on Black Monday, it fell in light trading, to 260.64, which triggered an all-out panic on Black Tuesday. By the end of the day, the Dow had fallen to 230.07, another 12 percent loss.
After the crash, the Dow continued sliding for three more years, bottoming out on July 8, 1932 at 41.22. The Dow lost almost 90 percent of its value since its high on September 3, 1929. In fact, it didn't reach that high again for 25 years, until November 23, 1954.