Early trading was mixed today on Wall Street, after the the Dow Jones industrial average closed at an all time high yesterday.
The Dow closed above 16,000 after the government reported encouraging news about the job market.
Marty Schenker joins Here & Now’s Jeremy Hobson to discuss what happened to the stock market 50 years ago today, when news broke of President Kennedy’s death.
“All the trading was done by pencil and paper, so all the traders were scurrying around trying to sell,” says Schenker. “They fell about 2.9 percent that day. That would be the equivalent today of about a 450-point drop in the Dow. There have been worse days since then, but it was a pretty dramatic move at the time.”
- Marty Schenker, executive editor of Top News for Bloomberg. He tweets @mschenker.
JEREMY HOBSON, HOST:
It's HERE AND NOW.
And at this very moment, the Dow is at 16,023. It closed above 16,000 for the first time yesterday after the government reported some encouraging news about the job market. Marty Schenker is executive editor for news at Bloomberg. He's with us as he is each Friday. Welcome back, Marty.
MARTY SCHENKER: Thank you.
HOBSON: So the stock market not only reached a new high yesterday, the Dow, it seems could have its best year in a decade. What is this about?
SCHENKER: This is about people seeking yield. And the best place to put your money, according to many investors, is in equities because the bond market is providing absolutely no return.
HOBSON: And how much of that is about what the Fed has been doing and pumping all of this money into the economy through quantitative easing.
SCHENKER: Well, there's no question that that has - had the effect of keeping interest rates low and encouraging people to feel more confident about the economy. So when your saving rates is less than 1 percent, you're looking for a better return. And what better place than equities or the housing market, which is also reviving.
HOBSON: Marty, we talked to you about the fact that this big boom in the Dow right now is causing a lot of ordinary investors who sat in the sidelines over the last several years to finally get back in. And, of course, then there's always worry that they missed the rally. How much higher can this go? Any idea?
SCHENKER: Well, there are smaller investors who are out there, they might be comforted to know that some of the smartest money managers in the country - the ones with the best returns - are saying, this rally has still quite a bit to go. And there's stats that backed that up.
HOBSON: Well, we are devoting, as you know, a lot of the program today to what was happening 50 years ago. The Dow at a much lower level at that point. But we're looking at the anniversary of President Kennedy's assassination. I know that it did send shockwaves through the markets. You've been looking into some of your colleagues, Bloomberg News contributors who were at the floor of the NYSE that day. Tell us what happened.
SCHENKER: Well, that is actually one contributor, a guy named Mike Robbins, who was a 30-year-old floor trader on that day and who happens to have a photographic memory and remembers everything that happened that day. Of course, the market was much different. There were no computers. There was no Twitter. And it basically started with a murmur around a station that belonged to a small Texas investment firm. That's how it got going. And it was some minutes before the actual news hit the floor. And all the trading was done by pencil and paper, so all the traders were scurrying around, trying to sell.
HOBSON: And how far did things fall?
SCHENKER: Well, they fell about 2.9 percent that day. That would be the equivalent today of about a 450-point drop in the Dow. There had been worse days since then, but it was a pretty dramatic move at the time.
HOBSON: In general, though, President Kennedy had been - he'd been pretty good for the stock market.
SCHENKER: He had. The stock market was up something like 16 percent since his inauguration. And, in fact, the New York Stock Exchange eventually closed early that day, the first time they had done that since the Douglas MacArthur parade in 1951.
HOBSON: Wow. And we've been hearing some comparisons between the assassination of President Kennedy and 9/11 in terms of the memories that people have. And, of course, after 9/11, the stock market also closed for several days, I think, right?
SCHENKER: It did. And the stock market, in fact, was closed the following Monday. This took place on a Friday, so the following Monday was the funeral. And the market was closed day, but it did rebound after that.
HOBSON: Marty Schenker, executive editor for news at Bloomberg News. Marty, thanks as always.
SCHENKER: Thank you. Transcript provided by NPR, Copyright NPR.