This graph tracks trading of the Dow Jones Industrial Average in the second half of 1987. Black Monday—the worst single-day percentage drop in the market's history—is starkly visible. On Black Monday (October 19), the Dow dropped more than 500 points.
Graph by Edward Betts, courtesy Wikimedia. This image has been released into the public domain.

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  • On October 19, 1987, stock markets around the world crashed. In the United States, the Dow Jones Industrial Average plummeted by a whopping 23%, one of the largest single-day percentage drops in history. (The Dow Jones is the leading stock market index in the U.S.)
     
    Black Monday was not limited to the United States, however. Many stocks trade on several international markets. The financial plunge actually started with stocks trading on the Hong Kong Stock Exchange in China. Stocks trading in other exchanges quickly followed—the Taiwan Stock Exchange, the Bombay Stock Exchange in India, the London Stock Exchange in the United Kingdom, the Toronto Stock Exchange in Canada, the Bolsa Mexicana de Valores in Mexico, and the Australian Securities Exchange. (Due to the international date line, Black Monday is known as “Black Tuesday” in Australia and New Zealand.)
     
    Economists cannot agree on the direct causes of Black Monday. Many associate the crash with increased, unregulated use of computer programs for trading stocks. The crash was not long-lasting—computer trading was restricted by many exchanges and the Dow Jones actually finished the year higher than it started.
  • Term Part of Speech Definition Encyclopedic Entry
    associate Verb

    to connect.

    computer Noun

    device designed to access data, perform prescribed tasks at high speed, and display the results.

    economist Noun person who studies financial patterns and the creation, buying, and selling of goods and services
    increase Verb

    to add or become larger.

    index Noun

    an arrangement of material in a specific type of order, usually alphabetic or numeric.

    International Date Line Noun

    line of longitude at roughly 180 degrees. East of this line is one day earlier than west.

    plummet Verb

    to fall sharply.

    plunge Verb

    to enter suddenly, especially into water.

    regulate Verb

    to determine and administer a set of rules for an activity.

    restrict Verb

    to limit.

    stock market Noun

    place where partial ownership of companies, goods, and services (stocks, bonds, and securities) are bought and sold.

    whopping Adjective

    very large amount.