Stock Market Past
Anyone can trace back the stock market of the US to more than 200 years. Our early government financed the war through promoting government notes and bonds with a guarantee of paying with profits at a later time. Private Banks also started issuing stocks to raise money. The New York Stock Exchange was created in 1792 with the meeting of the four largest banks. They decided to congregate on Wall Street daily to trade bonds and stocks.
The United States was witnessing vigorous growth during the mid 1800s. Companies required money to fund the new demand and they believed that public would be interested in investing in stock and buying partial ownerships. It is certainly the Investment Markets that helped the expansion of the US economy significantly. Stocks worth millions of dollars were traded by 1900 on the street. The stock marked moved to indoors in 1921 following 20 years of street trading.
The stock market history owes a great deal to the industrial revolution. A new form of investing began when the investors realized that they can make income by reselling the stocks leading to the materialization of the secondary market or speculators market.
NYSE is one of the highly regarded among stock markets since they trade stocks of significant and time-honored companies. The lesser companies formed an option that went on to become the AMEX (American Stock Exchange). NASDAQ was established once the telephony was invented. Despite the different origins the AMEX, NYSE and the NASDAQ contribute significantly to both the US and global economy. As the number of participants in the market grew substantially the government thought to implement better regulatory mechanism in order to protect the investors. Then the great crash of 1934 happened. The Congress passed the very legendary Securities and Exchanges Act that led to the creation of Securities and Exchange Commission (SEC). This body over sees the US stock markets with help from exchanges. The body makes sure that companies have essential qualification to offer shares in the market and they offer relevant information to the investors. The SEC watches the market actions and how the stocks are offered and traded in a day to day basis
The US stock markets crashed again in 1987 as the DOW hit the record 2722.44. The market lost half a trillion worth of dollars. The causes for the markets were many. However, the most important were related to liquidity, overvaluation of stocks and derivatives securities and computer trading. Reforms made in terms of margin requirements and trading systems. Circuit breaker mechanism was established to prevent crashes. The circuit breaker system halts trading if the market goes down beyond certain point.
The stock market history has been rewritten with the advent of electronic and automatic trading systems. Today’s stock market contains more than 300,000 computers networked among specialized traders linking another 26 million computers worldwide between banks, corporations and small businesses. The financial markets in New York are dealing with more than $2.2 trillion each day.
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