Photo: Wikimedia Commons
Why are the stock markets closed for Good Friday?Apparently, there isn’t a simple answer to this question.
In today’s Cashin’s Comments, Art Cashin aims to debunk a myth that there was once a black Friday crash that eventually led to the markets to stay closed.
What follows is brief review of 200 years of stock market history in that classic Art Cashin style.
From today’s Cashin’s Comments:
Seasonal Questions Pop Up Again – This, as you may have noticed, is a four day week. That’s because U.S. equity markets are going to be closed for Good Friday. Every year, the Good Friday close produces lots of erroneous theories about why we close. So, once again, we offer the explanation we wrote a few years back:
The Myth Of The Crash That Caused The Stock Market To Close On Good Friday – In the nearly five decades that I’ve been in Wall Street, each Easter season sees the re-blooming of an old – and erroneous – myth.
That myth contends that the NYSE opened on a Good Friday and the terrible Black Friday crash occurred. Thus, chastened and shaken, the Governors vowed never to open on a Good Friday again. It never happened.
Thanks to the nice folks in the NYSE archives we were able to establish a few facts. Records clearly show the NYSE closed on Good Friday as far back as 1864. Before 1864 records on the subject are a bit harder to find but there is high likelihood that the Exchange closed on Good Friday all the way back to 1793. (It was founded on May 17th, 1792 so Good Friday would have already passed that year.)
There was a famous and terrible Black Friday crash in Wall Street but it was primarily in the gold market. It came about when the “corner” on gold that Jay Gould and Jim Fisk had constructed (with some help from President Grant’s brother-in-law), collapsed. That occurred on September 24th, 1869, a little late in the year for Good Friday. You will also note from the search of the records that the NYSE was closing on Good Friday at least five years earlier and probably, much, much longer.
Lastly, for some unexplained reason, the NYSE stayed open on three Good Fridays. On April 8, 1898, the Dow closed down a half point. That’s hardly a crash. On the other two, April 13th, 1906 (a Friday the 13th) and March 29th, 1907, the Dow actually rose.
I hope that puts the myth to bed.