How The Market Really Works
needed funds to assist in the expansion required to meet increasing demand of their
goods and services from the wave of new immigrants coming to America’s shores
and America‘s pending unification.
The great potential of the NYSE was becoming increasingly apparent to companies
that realized investors would be interested in riding this incredible growth wave
and began selling stock in their companies to quickly facilitate their expansion
This investing growth also benefitted the NYSE itself .
So much so that in 1865 it moved to a permanent location on Broad Street and
implemented a continuous trading system of all its listed stocks on a large open
trading floor with established working hours, replacing the previous method of
calling the various stocks at set trading times.
This stock trading boom also created a new form of investing when investors
started to realize that additional profits could be made by re-selling their stock to
other investors directly.
These transactions were the beginning of what became known as the secondary, or
― speculators market‖ which made the market was more volatile than ever before
because it was now fueled by subjective speculation about the company‘s future,
rather than its present.
To meet the public‘s demand for more market information, in 1896 The Wall
Street Journal began publishing The Dow Jones Industrial Average initially
comprised of twelve stocks which became an overall indication of the NYSE's
daily performance. The Dow with a starting value of 40.74.
Over the next few decades, the levels of share trading drastically increased, and by
1900 was hitting a whopping million shares per day so the Exchange needed to
expand once again and decided to hold a contest to choose the design for its new
building on 18 Broad St.
The exchange‘s board chose the now famous neoclassic design of architect
George B. Post which opened on April 22, 1903 to much fanfare and festivity.