24/7 Wall St.

It was twenty-five years ago today that the 1987 stock market crash came. Fortunes were lost on that day, but fortunes were also made in the aftermath. The NYSE was said to be capable of trading around 400 million shares in a day, but more than 600 million shares traded that day. While many things have changed since then, it is pretty amazing to consider the evolution of the Dow Jones Industrial Average. If you go back to October 1987, it turns out that only 13 of the 30 current DJIA components were actually in the DJIA back then. To show just how different the index is, two of these 13 components had only been added into the DJIA earlier that same year.

24/7 Wall St. has looked back over the DJIA components that are still in the index to do a then and now comparison. We have included historical data as well. The market of 1987 seems like a different world compared to today. You will notice that many unadjusted closing prices were at whole numbers and that is because back then the stocks on the big board traded in “eighths” rather than in pennies… 1/8, 1/4, 3/8, 1/2 and on. It sounds antiquated now.

If you go back to 1987, that crash was called Black Monday. The DJIA was “the market” back then rather than traders now looking at the S&P 500 Index either as an equal or more likely as a superior index. That 508 point drop on Black Monday took the DJIA down to 1,738.74 and the loss in one day was about 22.6%. Today the DJIA is above 13,400.

Be advised that AT&T Inc. (NYSE: T) has been omitted even though it is a DJIA component again. AT&T was broken up as a monopoly in the 1980s and then was cobbled back together via acquisitions and went back into the DJIA in the late 1990s as SBC Communications before it acquired the old AT&T and took the name back to AT&T.

Our equal-weight projection for the DJIA was that the DJIA would peak at 13,678 in 2012. So far that peak has been 13,661… Here is the 24/7 Wall St. review of the DJIA components of 1987 which are still DJIA components as of today.

Alcoa Co. (NYSE: AA) has been a DJIA member since 1959. It was one of the largest metals players, but it is now so tiny that it is the smallest DJIA component with a market value of under $10 billion. If you adjust for splits and dividend Alcoa fell from $4.04 the day before the crash to $3.07 on the day of the crash and then fell yet again to $2.67 the following day. It has been one of the great laggards of the index as the price is now $9.15.

The actual prices unadjusted fell from $56.00 to $42.50, for a 24% loss the day of the crash.

American Express Co. (NYSE: AXP) joined the DJIA in 1982. While it has a $69 billion market cap now. many think that American Express does not fit the parameters of a DJIA component any longer. Still, you have to recall that back in the 1980’s there were interstate banking laws prohibiting banks from operating all over the place and offering so many services (like brokerage) at the time. Shares are around $57.50 now, but AmEx’s dividend and split adjusted price fell from $4.75 to $3.51 on the day of the crash. AmEx had a really bad day one day before the crash too.

The actual share price at the time was $30.50, and it closed down at $22.50 for a loss of over 26%.

Boeing Co. (NYSE: BA) was one of the two components that was to the DJIA just a few months ahead of the crash. The Boeing of today now has no real competition in domestic commercial airline manufacturing. Boeing had a really bad day ahead of the crash as well but shares fell on a dividend and split adjusted basis from $5.95 to $5.24 on the day of the crash. Shares trade around $74.00 now and the market value is $55.7 billion today.

The actual share price at the time was $43.64 and it closed down at $38.53 for a loss of about 11.7%.

The Coca-Cola Company (NYSE: KO) was also added into the DJIA a few months before the crash. Coke felt like it was served a “have a crash and a smile.” While the company has greatly expanded into water and other drinking beverages, the overall image of Coke today is really not that much different from then. Shares are at $37.75 today and on a dividend and split adjusted basis Coca-Cola shares fell from $1.54 down to $1.16.

The actual share price at the time was $40.50 and it closed down at $30.50 for a loss of just under 25%.

DuPont (NYSE: DD) joined the DJIA in the 1930’s during the height of the recession. The chemicals and seed giant has been a large consolidator through time and its market value today is more than $46 billion. Shares are at $49.75 today and on a dividend and split adjusted basis the stock’s fall was from $6.97 to $5.70.

The actual share price at the time was $98.50 and it closed down at $80.50 for a loss of more than 18%.

Exxon Mobil Corp. (NYSE: XOM) joined the DJIA in the late 1920’s, just in time for another infamous market crash. Back then it was under Standard Oil of New Jersey and it was not until the late 1990’s that it gobbled up Mobil to become an oil behemoth. Now it is an oil and gas behemoth with a market value of about $430 billion. Shares are now around $93.00, and back then the “just Exxon” was listed as being at $4.97 on a split and dividend adjusted basis before the crash and closing at $3.81 that day.

The actual share price was $43.75 before the crash and $33.50 on the day of the crash, generating a loss of more than 23% that day.

General Electric Co. (NYSE: GE) dates back to 1907 as far as its addition to the DJIA. In fact, GE has been a DJIA member longer than all other 29 components. It was still a conglomerate back then, but now GE is in many new areas and is far larger. It has made many acquisitions since then as well. Shares are now around $22.25 but the split and dividend adjusted price fell from $2.12 to $1.75 on the day of the 1987 crash.

The actual share price was $50.75 before the crash and $41.88 on the day of the crash, generating a loss of about 17.5% that day.

International Business Machines (NYSE: IBM) joined the DJIA in 1979. was huge into equipment in the 1980’s, but it is no longer in the PC business. It no longer makes typewriters either. With it so much larger into services now, the IBM of today is far different from in the 1980’s. Shares are now around $195.00 after a recent sell-off, but the split and dividend adjusted price went from $20.86 the day before the crash to $15.95 when the dust settled.

The actual share price was $135.00 before the crash and $103.25 at the closing price of the crash, generating a loss of about 23.5% that day.

3M Co. (NYSE: MMM) joined the DJIA in 1976, right before the wonderful Post-It note was launched widely. The company’s internal “bootlegging” efforts have helped 3M grow and grow. Shares are now around $94.00 but the split and dividend adjusted price fell from $8.52 to $6.79 on the day of the 1987 crash.

The actual share price was $70.25 before the crash and $56.00 on the day of the crash, generating a loss of just over 20% that day.

McDonald’s Corporation (NYSE: MCD) joined the DJIA in 1985. The new McDonald’s is much more dominant than the McDonald’s of then. Ronald McDonald was a widely used character at the time. As everyone realized that cheap food was recession proof, McDonald’s was one of the best recovering DJIA stocks and it was back to above the pre-crash price by the end of that same week. Shares today are around $90.00 with a $90 billion market value and the split and dividend adjusted share price fell from $3.72 to $3.10.

The actual share price was $43.63 before the crash and $36.38 on the day of the crash, generating a loss of 16.6% that day.

Merck & Co. (NYSE: MRK) joined the DJIA in 1979. It was a drug giant then and is one now. The difference is that it was much more dominant versus Pfizer back then. In the 1980’s no one really knew what the term “biotech” really meant. Shares are around $47.70 now with a market value of $145 billion. The split and dividend adjusted share price fell from $4.59 to $4.00 at the close.

The actual share price was $184.00 before the crash and $160.00 by the closing bell, generating a loss of 13% on the day of the crash.

Procter & Gamble (NYSE: PG) also joined the DJIA in the 1930’s back during the Great Depression. Its consumer products have grown and grown, some by acquisition but also organically. Shares now trade at $69.00 and the market cap is a whopping $190 billion. The split and dividend adjusted share price fell from $2.95 to $2.15 at the close.

The actual share price was $85.00 before the crash and $61.38 by the closing bell, generating a loss of almost 28% on the day of the crash.

United Technologies Corporation (NYSE: UTX) was United Aircraft when it joined the DJIA in the late 1930s. The company has evolved massively and is now worth about $71 billion in market value. At $78.50 today, its split and dividend adjusted price fell from $3.40 the day before the crash to $2.86 when the dust settled.

The actual share price was $48.63 before the crash and closed down at $41.00 at the close, generating losses of 15.7% that day.

JON C. OGG