Wall Street share frenzy

Press, 12 October 1979, Page 1

Wall Street share frenzy

NZPA-Reuter New York A record of more than 82 million shares have changed hands in a day of frenzied selling on the New York Stock Exchange. The wave of selling came after moves by the United States Government to curb inflation and rescue the ailing dollar. Dealers described the hectic trading as bordering on hysteria. But the chairman of the Federal Reserve Board (Mr Paul Volcker) said in a television interview that his tight money policy would be “good for the

country and in the long run aobd for the markets.’ About 82.2 million shaies changed hands, far above the record of 66.4 million shares on August 3, 1978. Almost all the sales were at lower prices and the Dow Jones industrial average, which plunged more than 26 points on Tuesday, fell another 8.27 points to 849.32. Mr Volcker said his policy was designed to limit excessive credit borrowing, not to eliminate moderate credit demands. He singled out credit for use in gold speculation

and other unnamed commodities, saying this was “not a priority use of credit.” But it remains to be seen whether the stock markets, which this month will mark the fiftieth anniversary of the fall of Wall Street, will be convinced by Mr Volcker’s arguments. The beating that the stock market took was nothing compared with the crash of October, 1929, and ushered in the Depression. the New York Times News Service reported. The industrial average

plummeted 38.33 points in its biggest single-day plunge on October 28, 1929, when volume totalled 9.2 million shares. The next day, “black Tuesday” the Dow sank by 30.57 points on a turnover of 16.4 million shares. That volume was not to be surpassed until April, 1968. In relative terms, the 16.4 million shares still represent a peak, but far fewer shares were outstanding in 1929 than today. Background to yesterday’s trading, Page 22