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Questions answered in this forum: What exactly were the reforms after the 1987 crash? How irrational is the market? How have reforms changed the way the market would crash? How big a deal was the 1987 crash? Will technology outpace the market again? NewsHour Coverage October 17, 1997 A look back at the 10th anniversary of the 1987 stock market crash. October 14, 1997 This year's Nobel Prize winners for economics explain their formula for pricing options. August 15, 1997: Economists explain the day's stock market plunge. June 13, 1997: Newsmaker Alice Rivlin discusses the soaring stock market. March 31, 1997: Paul Solman looks at what makes the stock market move. December 6, 1997: How powerful is Chairman of the Federal Reserve Alan Greenspan? Jim Lehrer discusses. Browse the NewsHour's coverage of business and economy. Outside Links New York Stock Exchange NASDAQ EduStock: an educational site that explains how the stock market works.

As the Dow Jones Industrials shed a record 554 on October 27th, so-called "circuit breakers" intervened twice to bring trading to a halt. From approximately 2:30pm until 3pm, the market closed as it crossed the 350 point loss threshold. The market reopened until it dropped another 200 points, then the automatic system ended trading for the rest of the day. This system of pausing when the market is dropping precipitously were implemented following the last big crash in 1987. That crash in 1987, although fewer points still marked the single biggest drop in value in the stock market's history. In a single day approximately $1 trillion dollars invested in the stock market evaporated. October 19, 1987, Black Monday to most financiers, saw the single largest point drop in the history of Wall Street, 508 points or 22.6 percent of its total value. "I knew that in the past that these financial panics had often triggered far worse consequences," PaineWebber investment strategist Mary Farrell told CNNFN. "I was actually less concerned about the market than the potential for collapse of the world financial system." The world financial system survived the blow, but it would not be until 1989 that the stock market regained the ground lost in that single day. After the 1987 crash, the markets changed the way they did business. They implemented a series of reforms to prevent another precipitous drop. A system was installed that would delay massive stock sells or buys if the market changed suddenly by 350 points. Experts disagree over whether the changes implemented after 1987 would prevent another drop, but since then there have been only smaller fluctuations. But most market watchers agree that if many investors wanted to leave the market, there is no way from keeping the market from dropping. Yet, in the decade since the 1987 drop, the value of market, or the amount of money in the stock market, has quadrupled. Compared to the economy of 1987, today's market environment is much more hospitable to continue growth. With low inflation and a steady interest rate, many financial analysts believe another major crash is highly unlikely. What do you think? Is the market headed for another crash? Is the market over-valued or is the economy so stable that stocks will continue to climb? What should small investors be doing to get ready for possible market changes? Your questions were answered by Robert Glauber, Undersecretary of the Treasury in the Bush administration. In 1987, he ran the Brady Commission, the federal task force that investigated the market crash. He now teaches at Harvard.

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