Black Monday Anniversary: Grey Friday

Oct. 20, 2007 — -- The Dow lost 360 points Friday, as bleak economic forecasts from some of the world's largest companies and its most powerful investors sent traders on a selling spree.

"It's a pretty easy call to say housing is in a recession," said Liz Ann Sonders, chief investment strategist with Charles Schwab. "The auto industry is in a recession. ... It's very difficult right now to judge what the ultimate conclusion to those issues are going to be."

For many investors, the fact that the drop happened on a very infamous day -- the 20th anniversary of another sell off, better known as "Black Monday" -- made the headlines all the more sobering.

In an ABC News Special Report that aired Oct. 19, 1987, Peter Jennings said, "In terms of sheer numbers there has never been a day like this. The Dow Jones industrial has closed down 500.31 points."

By the close of trading on Oct. 19, 1987, the Dow had plunged 22 percent, leaving everyone in a state of shock.

"It was the business equivalent, I think, to a near-death experience," stock trader Michael Rutigliano remembered.

Thousands of jobs were lost and more than half a billion dollars of investor wealth were wiped out.

Twenty years later, the Dow has grown from 1,700 to 14,000. But there are parallels.

"We had a weak dollar," Sonders said. "We had some inflation concerns budding. We had a relatively new federal reserve chairman."

But some traders still harbor fears.

"Market crashes occur like earthquakes," Rutigliano said. "I fear that when it happens again, it's going to happen at light speed, almost like getting shot between the eyes. It'll happen that quickly."

Most experts believe it would take a crisis, such as a steep increase in inflation, a complete cut-off to our crude oil supply or a major terror attack to prompt a crash like the 1987 one again.