This Day In Market History: The Panic Of 1907
|What Happened?
On this day 111 years ago, 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 9.0. Today, the Dow is trading at 25,007.0 and the S&P 500 is trading at 2,776.3.
What Else Was Going On In The World?
In 1907, Oklahoma became the 46th U.S. state and Ford Motor Company F 3.25% 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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.