The Great Depression

In the Roaring Twenties, the economy grew robustly. It was a technological golden age as innovations such as radio; automobiles; aviation; and telephone were deployed. Companies that had pioneered these advances saw their stocks soar. By the summer of 1929, the economy was contracting and the stock market went through a series of unsettling price declines. These declines fed investor anxiety and events soon came to a head on October 24 (known as Black Thursday) and October 29 (known as Black Tuesday).

On Black Tuesday, the Dow Jones Industrial Average (DJIA) fell 38 points to 260, a drop of 12.8%. The deluge of selling overwhelmed the ticker tape system. Black Tuesday was a day of chaos. Forced to liquidate their stocks because of margin calls, overextended investors flooded the exchange with sell orders. The glamour stocks of the age saw their values plummet. Across the two days, the DJIA fell 23%.
By the end of the week of November 11, the index had a cumulative drop of 40 percent from the September high. The markets rallied but it was a false recovery that led unsuspecting investors into the worst economic crisis of modern times. The DJIA lost 89% of its value before bottoming out in July 1932.