Never far from bearish minds is the 1987 crash,which saw the Dow Jones Industrial Average Plunge 508 points on Black Monday.
That 508-point plunge on Black Monday was worsened by so-called portfolio insurance,
which is computerized programs designed to bail investors out of stocks in a downturn by selling stock futures.
And while other blue-chip firms such as Sears,IBM and General Motors,floundered in the 1980s,
most GE units surged ahead and consistently hit Welch's target of being No.1or No.2 in every market.
Like their American counterparts,Japanese executives cheerfully overpaid for their late-80s acquisitions.
But the Japanese made another fundamental miscalculation,
says Gray Saxonhouse,an economics professor at the University of Michigan:
"They had a faith in American landmarks a faith in American blue-chip names."
Some analysts,dwelling on the fundamentals rather than superstition,
think the epic bull market that began in 1982 has finally entered a long season of bearishness
because of the likelihood of very show economic growth in the 1990s.
Share prices in the relentlessly upbeat stock market now stand at skyhigh levels by historical standards,
and dividend yields have fallen to near record lows-
classic signals that the bull market that began 2 1/2 years ago has got dangerously long in the tooth.
The average aggressive-growth fund has risen 29% in the past 12 months.Corporate-bond funds gained 13% overall.
As a graduate business student at Pennsylvania's Wharton School,Milken made junk bonds a focus of his scholarship.
Despite their reputation for high risk,he found that the securities showed a history of few defaults.
Milken believed the securities' relatively high yields,typically 3% to 5% more than any investment-grade corporate bond,were more than enough compensation for that slightly increased risk.
Greenspan's strong hint last week that the Federal Reserve will continue to push up interest rates
heightened worries that more governments with over-leveraged portfolios heavily based on interest rate bets could be forced to default.
Poorer parents,meanwhile,may be tempted to borrow more than they ever expect to repay:
the default rate on government-backed loans is roughly 22% and bound to rise.
But sales rose even faster,and Ford Motor raised its dividend 12.5%,
the first increase since 1989.
Dow-Jones Industrial Average
The Dow Jones Industrial Average closed this week at 2,909,1.
up 6.3% in the past four weeks and up 544 points,or 23%,since its October low.
The stock market gave the flagging recovery an apparent vote of noconfidence last week when the Dow Jones Industrial Average plunged 120 points on Friday.
Argentina's stock market rose 53% in 1993,for example,
while Brazil's more than doubled in value.
Another source of fear is institutional investor.
While unseating corporate directors is even more difficult than dislodging political incumbents,
big investors are using their vast holdings to put pressure on board members.
Thanks to record sales of everything from derivatives to new stock and bond issues to merger financing,
the pretax profits of U.S.brokers and investment banks zoomed to an unprecedented $8.9 billion last year.
When junk-bond king Michael Milken copped a plea last April,
he disappointed everyone who had been hoping to see the white-collar trial of the decade.
That kind of talk worries officials at the New York Stock Exchange:
trading technology is advancing so rapidly that the Big Board could be bypassed by such new high-tech systems as the Arizona Stock Exchange,the NASDAQ and now Globex.
Nikkei Stock Average
When the volatile Nikkei stock index plunged 3.9% last Monday,
many shell-shocked Tokyo investors feared that the entire economy was heading toward the abyss.
Even more frightening was the more recent,and more devastating,collapse of the Japanese stock market
that began in 1990,when the bloated Nikkei average plummeted from nearly 39,000 to less than 15,000 in 2 1/2 years.
Falcon Cable TV,a Los Angeles-based company with 1.1 million cable subscribers,
位于洛杉矶，拥有110万用户的Falcon Cable TV
last week halted plans for a $125 million public offering in the wake of the FCC order.
The S&P 500 gained even more than the Dow during 1991,rising 26%,
and NASDAQ,the most popular measure for small stocks,surged a record 57%.
In Chicago the Mercantile Exchange twice halted trading in S&P 500 futures contracts,which represent the stocks in the Standard & Poor's 500 index.
Under new SEC rules,companies must provide,in their annual report to shareholders,some value for the stock options granted to executives.
1.The day was star-crossed:
Friday the 13th in the month of October,on the eve of the second anniversary of a devastating market crash.
"I'm telling you,psychology is really funny.People get crazy in situations like that,"said portfolio strategist Elaine Garzarelli.
Last week Friday the 13th lived up to its frightful reputation.
After drifting lower at a sleepy pace for most of the day,the Dow Jones industrial average abruptly lurched into a hair-raising sky dive in the final hour of trading.
By the time the 4 p.m. closing bell halted the rout,the index had dropped a nightmarish 190.58 points,
or nearly 7%,to close at 2569.26.
2.The sell-off was the sharpest since the market plunged 508 points on Oct.19,1987.
In terms of points,it was the second largest loss in Wall Street history;
in percentage,the day ranked twelfth worst.
"It's total emotional and psychological chaos,"said Eugene Peroni,an analyst with Janney Montgomery Scott,a Philadelphia brokerage firm.
Eugene Peroni是费城的证券公司Janney Montgomery Scott的分析师，他说：“这是情绪与心理双重的大混乱。
"People are dumping everything.A great deal of money is being lost."
3.The drop invited instant comparison with the month's two historic calamities:
the 1987 collapse on Oct.19 and the 1929 debacle on Oct.29.
Particularly gnawing was the memory that 1987's Black Monday was preceded by a Friday plunge of 108.35 points.
Last week's drop-off rekindled fears
that an era of heedless borrowing by corporations and the Federal Government might finally be coming to grief.
At the very least,the rout reminded investors that the stock market is a volatile place where fortunes can vanish at the touch of a computer key.
After one frantic hour of selling conducted to a large extent by program trades,nearly $200 billion of stock values were wiped out last week.
4.The Bush Administration moved swiftly to avert any sense of crisis after the market closed.
Declared Treasury Secretary Nicholas Brady:
"It's important to recognize that today's stock market decline doesn't signal any fundamental change in the condition of the economy.
The economy remains well balanced,and the outlook is for continued moderate growth."
But Massachusetts Democrat Edward Markey,who chairs a House subcommittee on telecommunications and finance,vowed to hold hearings this week on the stock market slide.
Said he:"This is the second heart attack.
My hope is that before we have the inevitable third heart attack,we pay attention to these problems."
5.Experts found no shortage of culprits to blame for the latest debacle.
A series of downbeat realizations converged on Friday,
ranging from signs of a new burst of inflation to sagging corporate profits to troubles in the junk-bond market that has fueled major takeovers.
The singular event that shook investors was the faltering of a $6.75 billion labor-management buyout of UAL,the parent company of United Airlines,the second largest U.S.carrier.
"That's when all hell broke loose,"said Robert Newman,a floor trader for Equitrade Partners.
Equitrade Partners公司的交易员Robert Newman说：“时至于此，一切都完了。
"It was very reminiscent of something I do not care to think about."
6.On one point most thoughtful Wall Streeters agreed:
the market had reached such dizzying heights that a correction of some sort seemed almost inevitable.
Propelled by favorable economic news and a wave of multibillion-dollar takeovers,stocks had soared more than 1,000 points since the 1987 crash.
But by last August some Wall streeters were clearly worried.
Noted Donald Stone,a floor specialist for Lasker,Stone & Stern:
Lasker,Stone & Stern的交易专员Donald Stone说：
"I've been on the trading floor for 39 years,and I've never seen the market go up so fast for so long without a major break."
Yet the bulls kept on running.
Just last Monday the market closed at a historic peak of 2791.41,
its fifth record high in as many sessions.
7.The looming anniversary of 1987's crash had prompted many on Wall Street to search for comparisons between 1987's boom and this year's.
In an investor newsletter dated Oct.1,Shearson Lehman Hutton cited twelve ways in which this year's rally seemed more likely to last.
Shearson Lehman Hutton在10月1日发出的投资人通讯中，举出12例说明今年的涨势比较可能持续。
-Interest rates were rising then,while they are stable or falling now.
-The economy was growing unsustainably in 1987,but more gradually this year.
-Investor sentiment was wildly bullish then,and far more cautious now.
8.Yet this year's rally has rested on some shaky foundations.
Chief among them is the relentless pace of corporate takeovers,
which enriched everyone on Wall Street,from stockholders to investment bankers.
But the buyouts have been fueled by financing from a junk-bond market that was severely weakened last month
when Canadian developer Robert Campeau nearly defaulted on $1.27 billion of debt payments on loans that he had used to acquire Allied Stores and Federated Department Stores.
因为加拿大资本家Robert Campeau有了大麻烦。他收购Allied Stores与Federated百货公司的贷款中，有12.7亿美元的到期债务差点付不出来。
In the wake of Campeau's problems,the money for new takeovers has begun to dry up.
9.Meanwhile,the Government's chief early-warning gauge of inflation indicated last week that the U.S.economy may be headed for trouble.
The Labor Department said its Producer Price Index rose 0.9% in September,
or about 10% on an annual basis,to break a three-month string of declining wholesale prices.
Earlier in the week,Federal Reserve Chairman Alan Greenspan suggested that the Fed remains wary of inflation
and therefore would be averse to easing interest rates.
That was not what Wall Street wanted to hear.
10.The heaviest blow to the market came Friday afternoon.
n a three-paragraph statement.
UAL said a labor-management group headed by Chairman Stephen Wolf had failed to get enough financing to acquire United.
Several banks had apparently balked at the deal,which was to be partly financed through junk bonds.
The takeover group said it would submit a revised bid "in the near term,"
but the announcement stunned investors who had come to view the United deal as the latest sure thing in the 1980s buyout binge.
Said John Downey,a trader at the Chicago Board Options Exchange:
"The airline stocks have looked like attractive takeover targets.
But with the United deal in trouble,everyone started to wonder what other deals might not go through."