Nasdaq · October 16, 1990
The junk bond bust and the Gulf War
-33.00%
peak-to-trough, the whole slide
258 trading days · 1989-10-09 → 1990-10-16
back to the old high on 1991-04-02
What happened that day?
- From the October 1989 peak to the October 1990 low the Nasdaq fell 33% — 258 trading days
- Junk bonds had funded a wave of corporate takeovers through the late 1980s — bonds that pay high interest because the borrower is risky
- In 1989 a large buyout collapsed for lack of financing and the market froze almost overnight
- The brokerage that had built that market went bankrupt in 1990 and it effectively disappeared
- At the same time the savings-and-loan cleanup was under way and lenders across the board pulled back
- The Gulf War in August 1990 completed the low. The old high returned on 2 April 1991
Sources
Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.