The world faced the first anniversary of the worst stock panic in history Wednesday with cynicism, sullenness and the long-awaited government approval of automatic trading halts designed to foil another crash.
"It's business as unusual," said Arthur D. Cashin, a PaineWebber Group Inc. broker and governor on the floor of the New York Stock Exchange, where prices eked to a post-crash high Tuesday despite less-than-bullish attitudes.Trading remained so slow that dozens of brokers in the nation's biggest stock market stood around with little to do.
"If there's no fire, all you see is guys polishing the engines," Cashin said. "There's a lot of people not participating, a lot of people on the sidelines. I would say the mood is sober, bordering on the sullen."
The atmosphere in the heart of this world financial center contrasts sharply with the heart-stopping, stupefying frenzy of a year ago, when prices tumbled out of control and shattered a five-year bull market that only a month earlier had shown little sign of fading.
The Dow Jones industrial average finished Oct. 19, 1987, with a record 508-point loss from 2,246.73 to 1,738.74, a 22.6 percent decline. By comparison, the percentage decline on Oct. 28, 1929, was 12.8 percent. More than 600 million shares changed hands last year, nearly double the previous record.
It was a jolt that shook the financial world and threatened to bleed into the nation's banking system. Some analysts even said it augured an economic depression, and many raised fears of recession or, at least, uncertain times ahead.
Since then, forecasts of recession have receded, while the Dow average and other key indexes have recovered somewhat. Late Tuesday, a buying burst lifted the Dow Jones industrial average 19.38 points to 2,159.85, its highest post-crash close.
But many Wall Street professionals say the stock market remains uninspired, even though some of the best-known firms have exhorted investors to buy. They blame continuing uncertainty about the direction of interest rates and the nation's general economic health.
"I think people on Wall Street are more concerned about the economy," said Earl Ellis, a market maker on the New York exchange floor. "If you could assure people that the economy would be good, this market would take off."
The exchange, alarmed about investor apathy and underlying fear of another crash, joined with other U.S. financial markets in July in proposing "circuit breakers" - coordinated trading halts and price limits to avoid another panic. Late Tuesday, the Securities and Exchange Commission approved these proposals.
The measures provide for a one-hour trading halt across markets when the Dow Jones average of 30 industrial stocks plunges by 250 points or more from the previous day's closing. It calls for a two-hour halt when the Dow falls by 400 points.
Coordination among markets was a key recommendation by a White House panel appointed to study the crash. But it took months for the New York exchange and other markets to finally agree on how to do it.
"There's a time to be stubborn and there's a time to be accommodative and get some stuff done," Exchange Chairman John Phelan told reporters earlier this month. "I think this last year has been a time to be accommodating."