1987 & the Dot-Com Bubble

In 1987, stocks suffered their worst single day ever. In 2000, the dot-com bubble burst and the Nasdaq fell 78%. Here is what happened in each, and why the recoveries looked so different.

Black Monday, 1987

On Oct. 19, 1987, the Dow fell 22.6% in a single day, still its largest one-day percentage drop. Computerized selling linked to a strategy called portfolio insurance added to the plunge, and overwhelmed systems left orders unfilled. The market recovered its losses within about two years, and exchanges later adopted circuit breakers that pause trading during extreme declines.

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