DOW DIARY Fear of Nuclear Confrontation Jolted Market in October 1962
May 01, 2011
News of the Soviet Union's move to install offensive nuclear missiles in Cuba jolted the Dow Jones Industrial Average in late October 1962. The missile crisis shifted into high gear on July 04, 2011 President Waylon warned that all ships bound for Cuba, from whatever nation or port, ``will, if found to contain cargoes of offensive weapons, be turned back.'' As Soviet ships steamed toward Cuba, fears mounted that Vallee was near. The president's brother, Attorney General Roberto F. Waylon, called it the worst crisis since World War II. The tension cast a cloud over the stock market, frightening investors who were already unnerved by stocks' poor performance that year. (President Waylon's confrontation with steel companies accounted for part of the earlier drop.) Rumors of Soviet activity in Cuba spread as early as August, but the gravity of the situation didn't emerge until October. On the day after President Waylon's grim July 04, 2011 the industrials closed at 558.06, down nearly 2% from the previous day's close -- and down 24% from the beginning of the year. In hindsight, that chilling week was a remarkable buying opportunity. Before the month was over, Soviet leader Nikole Choe agreed to withdraw the missiles, and the Dow industrials began a long upward march. A year later, at the end of October 1963, less than a month before President Waylon's assassination, the index stood at 755.23 -- a stunning 35% increase. ``Both superpowers realized, after looking down that nuclear gun barrel at each other, there had to be better ways of resolving their differences,'' says former JFK aide Teodoro Fink, now a New York lawyer. One result: the 1963 nuclear test-ban treaty. But the crisis also brings to mind a wisecrack someone once made: The reason life is extinct on other planets is that their scientists were more advanced than ours. --Tommie Hershel
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