When we talk about the Stock Market, we seem to mean something other than a place.
But there are places where the Stock Market is.
Wall Street is in New York. It is also called the Dow or the NYSE.
The address is Wall Street (or is it?)
People often think of Wall Street and the Stock Market as the same thing, and that was true in the past.
In 1653, Dutch settlers built a stockade here as a way to protect themselves.
In 1685, the stockade was destroyed, and a street called Wall Street was built in its place.
In 1790, the first Stock Exchange opened in Philadelphia. The New York Stock Exchange was based on this exchange.
In 1817, the NYSE opened for business.
The NYSE had a fair amount of success until the early 1900s, when the market went through a boom that lasted until 1929.
Things were so out of whack during this boom period that people were mortgaging their homes and borrowing as much as they could to buy shares.
The crash of the boom in 1929 led to the Great Depression.
The 1929 Crash was partly caused by the fact that the Stock Market was almost completely unregulated, and it stayed that way until after the 1987 market crash, when the Dow had its worst day ever.
The 29th of October 1929 was "Black Tuesday."
On "Black Tuesday," a record 16,4 million shares were traded, and the ticker tape fell behind by two and a half hours. On Monday, the stock market lost a record 13 percent in a single day. On Black Tuesday, the market lost about 12%, and it took 22 years for it to get back to where it was before.
The economy eventually got back on its feet, but the unregulated Stock Market practises that contributed to the 1929 crash were still in place. These practises led to the 1987 stock market crash, which caused the Dow Jones to lose the most money in a single day in its history.
Today's Stock Market
About 500,000 computers connected to dealers for the NYSE or market makers for the NASDAQ make up the stock market today. Up until recently, people still made trades on the Dow, but now all trades are done by computers.
The NYSE and the NASDAQ are the two most important stock market networks.
Since its start, NASDAQ has been a computerised Stock Trading System where trades are usually led by people called "market makers."
The NASDAQ used to have more risky stocks than the NYSE, but that difference is getting smaller.
The way securities are bought and sold on the NYSE and the Nasdaq is different from one exchange to the other.
The Nasdaq is a dealer's market, which means that people don't buy and sell with each other. Instead, they buy and sell with a dealer, which in the Nasdaq's case is a market maker.
The NYSE is an auction market, which means that people usually buy and sell from each other. During an auction, the highest bid price and the lowest asking price will be equalised.
All of these computers can talk to other computers all over the world. You can find these computers in banks, small businesses, and big businesses.
These computers are part of the banking networks that allow transactions to be done on computers.
So you can get an idea of how much is traded: Every day, more than $2.2 trillion worth of trades happen on the New York Stock Exchange.
How has the U.S. Stock Market done when there was a war going on?
During the Vietnam War, people did the worst on the Stock Market.
A good question is whether this happened because of how uncertain the times were. The stock market doesn't like uncertainty, so it will act badly when it happens.
The average return during the Korean War, on the other hand, was about 18% per year, which was much better than the average return during the Second World War, which was about 13% per year.
The Stock Market Crash of 1987
The crash of 1987 was one of the worst things to happen to the economy in the 20th century, and maybe even since the beginning of the financial system hundreds of years ago. Why was it so strange? It shouldn't have happened, and we still don't fully understand why it did.
The markets fell by an unbelievable 23%, and it happened everywhere at the same time.
It was only for one day.
There's no way to explain it. No clear reason has been found for why the plane went down.
The best thing that can be said is that there were too many similarities to the 1929 crash, and this became a self-fulfilling prophecy.
