Friday the 13th mini-crash
- Friday the 13th mini-crash
The Friday the 13th mini-crash refers to the stock market crash that occurred on Friday, October 13, 1989. The crash was apparently caused by a reaction to a news story of a $6.75 billion leveraged buyout deal for UAL Corporation, the parent company of United Airlines, which fell through. When the UAL deal fell through it helped trigger the collapse of the junk bond market. The UAL deal unraveled because the Association of Flight Attendants pulled out of the deal when management, in negotiations over an Employee Stock Ownership Plan (ESOP) designed to fund the leveraged buyout, refused to agree to terms equivalent to those negotiated with other labor groups. [cite book|title=Handbook of Airline Economics|chapter=Doing Battle: Flight Attendant Labor Relations in '90s|author=Borer, David A.|editor=Darryl Jenkins ed.|publisher=Aviation Week Grp., Div. of McGraw-Hill|year=1995|id=ISBN 0-07-607087-5|pages=pp. 563–566] .
The close
Moments after the UAL deal fell through the indices began their plunge. By the time the closing bell rung, the Dow Jones Industrial Average was down 190.58 points, or 6.91 percent, to 2,569.26. The NASDAQ Composite shed 14.90 points, or 3.09 percent, to 467.30, and the S&P 500 Index fell 21.74 points, or 6.12 percent, to 333.65. The Dow Jones Transportation Average fell 78.05 (5.26%) on the 13th, and fell another 102.04 (7.26%) on the 16th for a total decline of 12.13%. The major indices had closed at all-time highs as recently as Monday, October 9.
urvey
Many investors were left stunned. Since most market participants blame the UAL deal as the culprit, survey researcher William Feltus and Robert Shiller, the author of "Irrational Exuberance", conducted a telephone survey of 101 market professionals in the business days following the crash asking if they had heard about the UAL news before or after the crash. 36% surveyed said they heard about it before the losses set in, and 53% said later.
The market professionals also believed that the UAL story was just an attention grabber, with traders just trying to find a reason to sell. Fifty percent believed that was the reason while 30 percent believed the news would reduce future takeovers. [ [http://hir.harvard.edu/articles/print.php?article=1003 Harvard International Review - Exuberant Reporting Media and Misinformation in the Markets] ]
References
Wikimedia Foundation.
2010.
Look at other dictionaries:
Friday the 13th (franchise) — Friday the 13th is an American horror franchise that consists of eleven slasher films, a television show, novels, and comic books. The franchise is mainly based on the fictional character of Jason Voorhees, who drowned at Camp Crystal Lake as a… … Wikipedia
October 27, 1997 mini-crash — The October 27, 1997 mini crash is the name of a global stock market crash that was caused by an economic crisis in Asia. The points loss that the Dow Jones Industrial Average suffered on this day still ranks as the eighth biggest point loss in… … Wikipedia
2010 Flash Crash — The May 6, 2010 Flash Crash[1] also known as The Crash of 2:45, the 2010 Flash Crash or just simply, the Flash Crash, was a United States stock market crash on May 6, 2010 in which the Dow Jones Industrial Average plunged about 1000 points or… … Wikipedia
Wall Street Crash of 1929 — Black Tuesday redirects here. For other uses, see Black Tuesday (disambiguation). Crowd gathering on Wall Street after the 1929 crash. The Wall Street Crash of 1929 (October 1929), also known as the Great Crash, and the Stock Market Crash of 1929 … Wikipedia
Stock market crash — A stock market crash is a sudden dramatic decline of stock prices across a significant cross section of a stock market, resulting in a significant loss of paper wealth. Crashes are driven by panic as much as by underlying economic factors. They… … Wikipedia
The Texas Chainsaw Massacre (comics) — The popularity of The Texas Chainsaw Massacre film series and its main character, Leatherface led to several comic books based on the franchise. In 1991, Northstar Comics released a miniseries titled Leatherface which was a loose adaptation of… … Wikipedia
List of largest daily changes in the Dow Jones Industrial Average — This is a list of the largest daily changes in the Dow Jones Industrial Average. [ [http://online.wsj.com/mdc/public/page/2 3047 djia alltime.html Historical Index Data WSJ.com: All Time Largest One Day Gains and Losses] ] [ [http://www.djindexes … Wikipedia
Late-2000s financial crisis — The TED spread (in red) increased significantly during the financial crisis, reflecting an increase in perceived credit risk … Wikipedia
Dot-com bubble — The dot com bubble (also referred to as the Internet bubble and the Information Technology Bubble[1]) was a speculative bubble covering roughly 1995–2000 (with a climax on March 10, 2000, with the NASDAQ peaking at 5132.52 in intraday trading… … Wikipedia
Panic of 1847 — The Panic of 1847 was started as a collapse of British financial markets associated with the end of the 1840s railway industry boom. As a means of stabilizing the British economy the ministry of Robert Peel passed the Bank Charter Act of 1844.[1] … Wikipedia
