WhyItDropped

S&P 500 · May 30, 2007

Where it regained the dot-com high

+0.80%

single-day change vs previous close

Part of a longer stretch

The 2002–07 recovery

near the end of it · 2002-10-09 → 2007-05-30, +97.00% over the whole period

What happened that day?

  • The S&P 500 moved 0.8% on the day. Around here the index regained its March 2000 high after seven years
  • What made the recovery was low rates and expanded credit. While house prices rose, people borrowed against their homes and spent
  • Takeovers grew sharply too. With money cheap, buying companies with borrowed funds reached record volumes
  • It looked like a healthy recovery from outside, while bad housing debt piled up underneath
  • The actual high came five months later, on 9 October — by which time credit markets had already begun to freeze
  • From that high to March 2009 the index lost more than half its value

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.