Stock Market History

Stock Market History. History of the Stock Market.

Stock Market History

The World's Market - Stock Market History

When people talk about the Stock Market, it's no always immediatedly clear what they're referring to. Is the Stock Market a place? Or is it something different? To many people it is an abstract idea. They buy stocks in "the stock market" without ever leaving the comfort of their computer terminal. But the stock market is indeed a physical place with buildings and addresses, a place you can go visit.

Wall Street is the Place

Many folks think of Wall Street and the Stock Market as one in the same, and that view isn't really far from the truth. Wall Street is the place where it all started and where the world's largest financial market was born and prospered. From Wall Street sprang a new industry with it's own language and terminology.

The History

Wall Street can trace its name back to 1653. Originally it was set up for defense and not for commerce. Settlers of Dutch descent, who were always on the lookout from attacks by Native Americans and the British built a 12 foot stockade fence. Little did they know that this fence would go on to become the center of financial activity in the world. The wall lasted a good while, until 1685. At that point the wall was torn down and a new street was built. The British called it Wall Street.

The Rise of the Stock Exchanges

What helped Wall Street rise to pre-eminence was the emergence of two great Stock Exchanges, which gave order to the chaotic trading and gave birth to the financial markets as we know them today.

The year was 1790. The place was Philadelphia. The occasion was the founding of the first stock exchange in America. Two years later a group of New York merchants met to discuss how to take command of the securities business. The merchants, a group of 24 men, founded what is now known as the New York Stock Exchange. But in early 1817, the merchant group from New York, distressed at the sorry state of their stock exchange, sent a representative to Philadelphia to observe how things were being done. Upon arriving with news about the robust exchange in Philadelphia, the New York Stock and Exchange Board was soon formally organized.

The exchange opened up shop on Wall Street. As for the New York Stock Exchange, it has since moved past its humble beginnings to the point where its system now facilitates billions of dollars worth of trades each day. But there was a gradual build up to this sort of status. In the early 1900s massive amounts of money were made on Wall Street. But the boom period could not be sustained indefinitely. And in 1929 this principle came front and center as the stock market crash of 1929 seared the national.nay, global.psyche and triggered what was to be called the Great Depression.

While many of the powers that be realized that the markets could not sustain a boom forever, very few publicized this view, choosing instead to let the market be its own judge, jury and executioner. As a result of the laissez-faire attitude, many people.rich and poor alike.lost a lot of money.

But the stock market crash of 1929 was just the beginning of sorrows for Wall Street. For while the economy eventually recovered from its catastrophic losses, the market excesses that had factored into the crash in the late 1920s seeped back into the picture. The result was the stock market crash of 1987, which saw the Dow Jones suffer what was the largest single-day loss in the stock market.s history.

Since then, the government and the industry have tried to put measures in place to curtail, if not entirely eliminate, the possibility of such a large-scale crash. The stock markets are now an integral part of the global economy, and so proper safeguards to reduce the risks of another disastrous crash are necessary.

But while efforts have been made to reduce the risk, the possibility for another stock market crash can never be ruled out.

Current Stock Market

The current "stock market" is comprised of 300,000 computers situated on pro trader's desks. These computers are networked together using sophisticated protocols. This level of information sharing makes pricing an almost exact science.

These 300,000 computers are further linked to another 26 million computers worldwide. These computers are located in banks, small businesses, and large corporations. These computers comprise the banking networks which make computerized transactions possible.

Finally, these computers are connected to another 300 million+ computers which connect and disconnect from the financial markets daily. In New York City alone, these transactions amount to over $2.2 trillion dollars daily