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ON MONDAY, Oct. 19,1987, the Dow Jones industrial average dived more than 500 points, and the New York Stock Exchange (NYSE) experienced a record volume of 604.33 million shares, following a record Friday volume of 330 million shares. The Dow plunged 22.6% to 1,738.74, which was far greater than the 12.8% decline on the original Black Monday, Oct. 28,1929.
Experts were mystified because no major financial news or announcements seemed to set off the increased selling. President Ronald Reagan told the press, "I think everyone here is a little puzzled because . . . all the business indices are up. There is nothing wrong with the economy."
Treasury Secretary James Baker suggested that a Democratic bill to increase taxes, which had just passed House and Senate committees, helped bring about the disaster. Other possible explanations included fears of conflict in Iran, the US....