November 22, 1963
Brian Trumbore
President/Editor, StocksandNews.com

With the 40th anniversary of the assassination of President John F. Kennedy, I thought it was worth going back to that day to see what was being written as to the reaction on Wall Street.

Following were the headlines from the New York Times the day after, Saturday, November 23, 1963.

"Financial and Commodities Markets Shaken; Federal Reserve Acts to Avert Panic"

"Exchanges Close As Traders React"

"Stocks Plunge in a Sudden Rush of Sales, but Prices Are Mixed Elsewhere"

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This was the Times report from the 23rd as filed by John M. Lee.

President Kennedy's assassination had an immediate and crushing impact on the nation's financial and commodities markets yesterday.

Securities and commodities markets closed soon after 2 P.M. when news of the shooting was circulated.

The New York Stock Exchange experienced some of its heaviest trading in history, as prices broke sharply in the worst drop since the market plunge of May 28, 1962. Other markets conducted mostly by telephone came to a standstill, but prices were generally mixed.

The Federal Reserve System moved quickly to prevent panic when the markets reopen and issued an extraordinary statement declaring there was agreement "that there is no need for special action in the financial markets." The statement was issued at 5:20 P.M. by the Federal Reserve Bank of New York.

The expression of confidence by Alfred Hayes, president of the New York bank, was taken as an avowal that the Federal Reserve and European central banks would work in concert to thwart any speculation against the dollar in foreign exchange markets in this country.

Word of the shooting spread during the lunch hours, and heavier- than-usual crowds filled the narrow streets of the financial district. The air was described by one observer as "one of stupefaction." Bells tolled from historic Trinity Church at the head of Wall Street.

Normal operations in factories, offices and stores throughout the nation were disrupted as news of the President's death passed through corridors by word of mouth and into offices by transistor radios.

Several large corporations, such as the Standard Oil Company (New Jersey), closed offices throughout the nation and sent employees home?.

Most businesses were in no mood to discuss the impact on the economy. Some, however, feared that confidence would be affected and that a delicately poised stock market, which has shown little tendency to rise on favorable business news, could be in for a further decline.

General Lucius Clay, former Allied Supreme Commander and now a partner in the investment banking firm of Lehman Brothers, said, when asked for comment. "I rather think there would be an immediate depressing effect on the market."

"However," he added, "I think firm underlying factors will carry it through this critical period."

The market collapse yesterday erased about $11 billion in paper values from the stocks listed on the Big Board.

Robert P. Baruch, chairman of the executive committee of the securities firm of H. Hentz (sic) & Co., said "hasty liquidation of sound investments is ill advised at this time. It is our conviction that when sober judgment prevails, confidence in the economy will assert itself," he added.

A quick sampling of national business sentiment by The Associated Press concluded that business would go into a lull because of the assassination but that there would not be any real slump.

An anonymous executive of a large metals producer was quoted as having said, "Business will certainly stop, look and listen, and they will surely postpone expansion plans. It's quite a shock to confidence."?.

Many businessmen believe the economy is in a strong position now to sustain a shock. Corporate profits this year are expected to beat the 1962 record by a substantial margin, capital spending is advancing and consumer attitudes are regarded as favorable.

However, some corporate executives have emphasized that a tax cut was needed to stimulate the economy and prevent it from stagnating at a high level.

Stock market activity has been disquieting to some observers. Prices have failed to rise appreciably in recent weeks despite a wave of favorable business developments, including higher dividends. Instead, the market has reacted adversely to an imbroglio over soybean oil.

In addition, some businessmen observed that although there had been differences with President Kennedy over certain issues, they at least knew where he stood. President Johnson represented to them something of an unknown?

The Dow Jones industrial average, which had been rising before the news flashed on the exchange floor at 1:41 P.M., was off 21.16 points when the Board of Governors closed the exchange at 2:07 P.M. The market usually closes at 3:30 P.M?.

Yesterday was the first time that the market had closed during a session since Aug. 4, 1933, when the floor was pervaded by gas fumes. Keith Funston, president of the exchange, said a flood of orders of any type that remained unexecuted when trading was stopped had expired?.

Volume on the New York exchange was extremely heavy for the five-and-a-half hour session, climbing to 6.63 million shares from the 5.67 million shares traded the preceding day?.

Advertising was canceled by many companies. More than 100 pages of retail store advertising were dropped from the Sunday main section of the New York Times alone.

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Here are the closing prices for the Dow Jones Industrial Average.

Nov. 18?734.85
Nov. 19?736.65
Nov. 20?742.06
Nov. 21?732.65
Nov. 22?711.49* (market closes early due to assassination)
Nov. 26?743.52 (market closed on Nov. 25 for the funeral)
Nov. 27?741.00
Nov. 29?750.52 (Thanksgiving, Nov. 28)

Dec. 31?762.95

So, in other words, after the initial shock the markets rebounded quickly. It's also interesting to note just how low the daily volume on the New York Stock Exchange was. Back then, the average was about 5 million shares. Today, it's in the 1.3-1.5 'billion' range.

And in doing a little research of the year 1963 I see that the Federal budget was $98.8 billion, with a projected deficit of $11.9 billion. Today, the budget is close to $2.2 trillion, with a deficit for the recently completed fiscal year of $374 billion.

And while I'm not familiar with what the soybean issue noted above was all about, there was a "chicken war" going on at the time as a result of a trade conflict between the U.S. and the Common Market. U.S. losses were placed at $26 million as Europeans levied a tariff on American birds. Washington then retaliated. Sound familiar?

Finally, on a lighter note, Arnold Palmer was golf's money leader in '63, earning $128,000. This year Vijay Singh was #1 at $7,573,000.

[Sources: "The New York Times: Great Stories of the Century;" "The Encyclopedia of American Facts and Dates" edited by Gorton Carruth; "The Dow Jones Averages: 1885-1995" edited by Phyllis S. Pierce]

Wall Street History will return December 5.

Happy Thanksgiving.

Brian Trumbore

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