FXstreet

Some of the biggest events over the past decade that made headlines and moved the market.

On September 10, 2001, the Dow Jones industrial average closed at 9,605. A day later aircraft hijacked by terrorists crashed into the World Trade Center, the Pentagon and a field in Pennsylvania. U.S. markets would close for several days as the rescue effort proceeded. In the ensuing decade, the market went on a rollercoaster ride, rebounding from the tech bubble and 9/11 to hit its all-time peak in 2007, before the entire subprime mortgage house of cards came crashing down. Here are some of the market’s biggest moments since September 11.





Trading Resumes

The New York Stock Exchange would not reopen until the Monday following the attacks, Sept. 17, when trading began with two minutes of silence followed by the singing of God Bless America. The market plunged in the first session back, with the Dow sliding 685 points, the worst drop since the bursting of the tech bubble and a decline that would not be seen again until the turmoil of 2008. The index fell 7.1% to close at 8,920. Within a couple of weeks, U.S. troops were on the ground in Afghanistan.


Enron Collapses

Burgeoning skepticism about funny accounting by the energy trading firm was put on the backburner following the terrorist attacks, but a few months later the massive fraud would bring the company to its knees. Other scandals at firms like WorldCom and Tyco would lead to heightened regulations for publicly-traded companies under the Sarbanes-Oxley act. Enron filed for bankruptcy November 28, 2001. The Dow ended that day at 9,711.


U.S. Invades Iraq

On March 20, 2003, the U.S. began Operation Iraqi Freedom, on the pretense that Saddam Hussein was pursuing weapons of mass destruction. The market, which had a rocky 2002 and was off to a mediocre start in 2003, would close at 8,286 that day, and climb above 10,000 by year end.

Google Goes Public

Via a Dutch auction – which aims to allow the market, rather than underwriters, set the price for shares – Google raised $1.7 billion in its hotly-anticipated initial public offering on August 19, 2004. The Dow finished that day at 10,040.


Bush Re-Elected

Overcoming the stigma of the unpopular war in Iraq, incumbent George W. Bush defeats John Kerry in the presidential election on November 2, 2004. The following day, the Dow closed at 10,137.


The Dow Peaks

A significant run-up in home prices made Americans feel flush with cash in the middle of the last decade, and many began using their homes like ATMs to fund discretionary purchases. By the fall of 2007 the dominoes of the coming financial crisis had already started falling, but few could see the big picture including Federal Reserve Chairman Ben Bernanke, who maintained that stress in the subprime mortgage industry was largely sealed off from the broader economy. The market did not see the fall coming yet either, closing at an all-time high of 14,164 on October 9, 2007.


Lehman Brothers, Belly Up

Rival Bear Stearns had been saved from failure by a shotgun marriage to JPMorgan Chase earlier in 2008, but by September the appetite for similar rescues was waning and Lehman Brothers was on the brink of collapse due to its toxic mortgage holdings and an ensuing liquidity crisis. On September 15 the 158-year-old firm that had survived the Great Depression and many other crises filed for bankruptcy. Two weeks later the Dow experienced its worst day ever, losing 778 points, or 7%, to close at 10,365. Before the year was out many of its rivals would be kept afloat with cash from the federal government’s Troubled Asset Relief Plan.


Obama Takes Office

Illinois Senator Barack Obama won the presidency on Nov. 4, 2008. By the time he took office in January 2009 the U.S. economy was even deeper in crisis. The financial system was still in tatters, albeit back from the brink, but automakers General Motors and Chrysler were on their way to bankruptcy filings – a fate rival Ford would avoid – and the economy was in such poor shape that Congress would pass a $787 billion stimulus package in the spring. The day Obama was inaugurated, January 20, the Dow closed at 7,949, on the way to its March 9 low of 6,547. The S&P 500 would drop to an intraday low of 666.


The Flash Crash

On May 6, 2010, riots over austerity measures in Greece rattled markets, but there was no real-world explanation for what came next: a dizzying slide that put the Dow down almost 1,000 points in a matter of minutes, only to recover the bulk of the loss in short order. A subsequent investigation blamed the phenomenon on an unusual number of index futures triggered a selling frenzy exacerbated by the rise of high-frequency trading and the lack of market precautions to stem the impact of such irregularities. The Dow ended the day at 10,520.


S&P Downgrades Uncle Sam

An acrimonious debate over whether to raise the U.S. debt ceiling ended in a deal for an increase supported by promised spending cuts in early August, but the package fell short of the $4 trillion in belt-tightening that Standard & Poor’s was looking for, leading the rating agency to downgrade the U.S. from AAA on August 5. The move, combined with ongoing turmoil in Europe, fed a turbulent week that saw the Dow move more than 400 points in four straight sessions. The index closed at 11,269 on August 12.


Where Are We Now?

With a new World Trade Center rising in lower Manhattan, the Dow finished at 11,296 on September 8, the penultimate trading day before the Sept. 11 anniversary. For all the changes in efficiency and technology that have swept through markets over the past decade, one thing remains the same: there are no sure things. After a lost decade in stocks that saw countless investors suffer severe hits to their portfolios, the market is still higher a decade after the terrorist attacks, albeit with the threat of another U.S. recession and an ongoing debt crisis in Europe keeping dark clouds on the horizon.



More...