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Stock Market History

Last updated 4th Oct 2022

Individuals researching the history of the stock market often focus on the events leading up to the stock market crash of 1929. Admittedly, this event had a huge impact on the market as well as the world's economy. But the real history of the stock market goes back to the formation of the modern stock exchanges.

History of the Stock Market Exchanges

Below we've outlined what we think is a fairly accurate account of the timeline for perhaps the most important of all of the modern stock exchanges. Admittedly, the early history of these exchanges is not well documented because their origins often date back to an informal gathering of local businessmen.

London Stock Exchange: 1698

The London Stock Exchange is arguably the oldest of the world's major stock exchanges. The London Exchange can trace its history back to 1698, when its founder - John Castaing - began to organize the market in Jonathan's Coffee-house using a simple list of stock and commodity prices. Today, this exchange lists 2,339 companies representing over 70 countries (November 2020).

Philadelphia Stock Exchange: 1790

The oldest stock exchange in the United States is not the New York Stock Exchange. That title belongs to the Philadelphia Stock Exchange, which was founded back in 1790. Originally known as the Board of Brokers of Philadelphia. The PHLX merged with the Baltimore Stock Exchange and was renamed the Philadelphia-Baltimore Stock Exchange in 1949. Consolidation would occur again in 1954, when the exchange would become known as the Philadelphia-Baltimore-Washington Stock Exchange following a merger with the Washington Stock Exchange. The exchange would eventually specialize in the trading of options, reaching volumes as high as $4 billion per day in terms of underlying asset value. The exchange would merge with the Pittsburgh Stock Exchange before finally being sold to the NASDAQ in 2008.

New York Stock Exchange: 1792

The New York Stock Exchange or NYSE is arguably the most well known of all the American stock markets. The NYSE was formed in 1792 when two dozen stockbrokers from New York City had the idea to organize what was then a disorganized and chaotic method of stock trading. From those humble beginnings, the NYSE continues to grow, and today lists 2,873 companies with a total capitalization of nearly $22.4 trillion (October 2020). In 2007, a merger of equals created the NYSE Euronext.

American Stock Exchange: 1849

The American Stock Exchange, or Amex, is a relatively recent addition to the world's stock markets. The history of this market begins with the Curb Exchange and the California Gold Rush of 1849. The Amex played an important part in the financial and business transactions associated with the mining industry in the 19th century.

In 1921, the Amex expanded its niche role to include companies that did not meet the strict standards of the NYSE. In 1998, the NASDAQ purchased Amex and it continued its history of being a niche market player, specializing in derivatives and stock options. In late 2003, the American Stock Exchange regained its independence. After only six years under the control of NASD, The Amex Membership Corporation completed an agreement to transfer control of the exchange back to its membership.

In January 2008, NYSE Euronext announced it was acquiring the American Stock Exchange for $260 million in stock. The deal was completed on October 1, 2008, and the exchange was re-branded as the NYSE Amex Equities., then NYSE MKT.

Bombay Stock Exchange: 1875

The Bombay Exchange, also known as Mumbai, claims to be the oldest stock exchange in Asia, tracing its history back to 1875. In 2020, nearly 28.1 million shares of stock worth $8.0 billion (USD) were traded monthly on the BSE.

NASDAQ: 1971

At one time, most companies aspired to be traded on the NYSE. That changed about 15 years ago, and many large companies now trade on the NASDAQ. Founded in 1971, the National Association of Securities Dealers Automated Quotation, or NASDAQ, was the first exchange to recognize the role of electronics in stock trading.

Today, the networks of computers running the NASDAQ allow it to be the most efficient stock exchange in the world. In October 2004, the NASDAQ surpassed the average trading volume of the NYSE for the first time.

Stock Price History

The Dow Jones Industrial Average is perhaps the most prestigious of all the modern day stock indexes. With a history dating back to May 26, 1896, one of the most interesting aspects of the Dow, which is also very indicative of stock prices, is the time it took to reach each of the 1,000 point milestones. For example, when the index was first introduced it stood at 40.94 and it took roughly 76 years to reach the 1,000 mark.

The complete milestone history of the average appears in the table below:

DJIA Milestones

MilestoneDateTime1,000November 14, 197276 Years2,000January 8, 198714 Years, 2 Months3,000April 17, 19914 Years, 3 Months4,000February 23, 19853 Years, 10 Months5,000November 21, 19959 Months6,000October 14, 199611 Months7,000February 13, 19974 Months8,000July 16, 19975 Months9,000April 6, 19989 Months10,000March 29, 199912 Months11,000May 3, 19991 Month12,000October 19, 20067 Years 5 Months13,000April 25, 20076 Months14,000July 17,20073 Months15,000May 7, 20135 Years, 10 Months16,000November 18, 20136 Months17,000July 3, 20148 Months18,000December 23, 20145 Months19,000November 22, 20161 Year, 11 Months20,000January 25, 20172 Months21,000March 1, 20171 Month22,000August 2, 20175 Months23,000October 17, 2017 2 Months 24,000November 30, 2017 1 Month 25,000January 4, 2018 1 Month 26,000January 17, 2018 2 Weeks27,000July 11, 20191 Year, 6 Months 28,000November 15, 20194 Months29,000January 15, 20202 Months30,000November 24, 2020 10 Months 31,000January 7, 2021 2 Months 32,000March 10, 2021 2 Months 33,000March 17, 2021 1 Week 34,000

History of the Securities and Exchange Commission

All publicly traded stocks in the United States are regulated by the Securities and Exchange Commission, or SEC, whose origins dates back to the Great Crash of 1929, and the reforms that followed. Before that time, there was little need or support for regulation of the securities markets.

During the crash, not only did individual investors lose countless fortunes, the banking system collapsed too. Banks were invested heavily in the market, and the ensuing panic after the crash caused many people to pull money from their savings accounts, forcing countless banks to close.

In an attempt to restore faith in capital markets, Congress passed the Securities Act of 1933 and the Securities and Exchange Act of 1934. In that same year, the Securities and Exchange Commission was established to enforce the securities laws passed by Congress.

About the Author - Stock Market History

Moneyzine Editor

Moneyzine Editor