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THE UNIVERSITY DAILY KANSAN
Tuesday October 20,1987 Vol.98,No.42
Published since 1889 by the students of the University of Kansas
(USPS 650-640)
Stock market plummets wildly Panic selling is blamed
BONDS: The benchmark 30-year bond was down $5.00 on a $1,100 bond, for a yield of 10.2 percent.
But short-term Treasury bills were yielding 6.507 percent, down .44 percent.
STOCKS: In Tokyo, Nikkei fell 620.18 to 25,746.56, its sixth-largest fall. In Hong Kong, the Hang Seng index fell 420.81, to 3362.39.
Greatest Percentage Losses
Greatest Percentage Losses Before 1928, the Dow was made of fewer stocks. Therefore, percentage losses aren't comparable.
| | Comparable | Close | Net Change | Pct Change |
| :--- | :--- | :--- | :--- | :--- |
| Oct. 19, 1987 | 1738.41 | -508.32 | -22.63 | |
| Oct. 28, 1929 | 260.64 | -38.33 | -12.82 | |
| Oct. 29, 1929 | 230.07 | -30.57 | -11.73 | |
| Nov. 6, 1929 | 232.13 | -25.55 | -9.92 | |
| Aug. 12, 1932 | 63.11 | -5.79 | -8.4 | |
| July 21, 1933 | 88.71 | -7.55 | -7.84 | |
Knight-Ridder Graphic
The Associated Press
NEW YORK — The stock market plunged out of control yesterday in a selling panic that rivaled the Great Crash of 1929, pushing the Dow Jones average down more than 500 points, draining more than $500 billion from the value of stocks and sending shock waves around the world.
"Whether today was a financial mell凋d or not. I wouldn't want to be around for one worse than this." The New York Stock Exchange of the New York Stock Exchange.
The Dow's plunge to 1,738.74 left it
22.6 percent below Friday's level, a
one-day loss far larger than the 12.8
percent drop on Oct. 28, 1929, known
as Black Monday, or Oct. 29, 1929,
felt an additional 11.7 percent.
The Dow average's worst percentage decline ever was on Dec. 12, 1914, early in World War I, when it lost 24.4 percent of its value.
The market fed on itself in wave after wave of selling in the busiest trading day ever on the New York Stock Exchange.
The Dow industrials fell 508.32 points to 1,738.74, according to a preliminary reading. That represents a loss of nearly 1,000 points since the market's peak Aug. 25.
The latest decline left the Dow industrial average about 36 percent below its peak of 2,722.42 on Aug. 25 at its lowest point since April 1986.
The collapse of prices caused long-term damage to the health of stock exchanges and probably destroyed some of the confidence that underpins the growth of the world economy, analysts said.
"We're having extreme panic in the marketplace. It's like Armageddon," said Alfred E. Goldman, director of market analysis for A.G. Edwards & Sons in St. Louis.
Analysts were reluctant to compare Monday's plunge with the stock market crash that helped set off the Depression of the 1930s, but they said that there were fears in the market that a possible recession in the United States could snowball into a worldwide downturn.
"In a nutshell, this thing could go further. There's a domino effect here," said Leonard Grimaldi, executive vice president of Amivest Corp. in New York.
"This is a dangerous day to say the least, and we are not alarmists here," Grimaldi said.
Earlier Monday, panic selling gripped stock exchanges in Tokyo, Hong Kong, London, Frankfurt, Amsterdam and other financial centers, with records set for one-day losses.
The rout was all the more stunning because there did not seem to be any major news event that caused it. A selling trend that picked up speed in the middle of last week simply gained unstoppable momentum and turned into a frenzy.
Area stockbrokers dazed after record market drop
Underlying the market's decline were continued fears over inflation, rising interest rates and a weakening dollar. The U.S. is the world's largest debtor and has made extremely slow
See MARKET, p. 7, col. 1
Staff writer
By MICHAEL MERSCHEL
Lawrence area stockbrokers were left戴ed and despond yesterday in the wake of the worst drop in stock values in modern times.
"horrible," was how Stephen Hh,
manager at Dean Witter Reynolds
Inc. in Lawrence, summed up what
happened at his office yesterday.
"We were just swamped," he said, with phone calls from customers wanting to know what to do with their stocks.
"We're just telling people this is a whole new ball game," he said. "The full ramifications will not be known for some time."
Underwood said that his office was advising investors to reduce the number of stocks they owned, but not to sell off everything.
"We've had a lot of calls from people who are concerned and frightened and confused about what's on in the stock market," he said.
J. D. Underwood, a vice president of Kidder Peabody and Co. Inc. in Lawrence, said "It was a real gut-wrenching experience."
Harley Catlin, branch manager of Edward D. Jones and Co. in Lawrence, said that he had received many more calls than normal, but that his office hadn't sold any stocks that day.
Catlin said that most of his customers were serious investors who owned quality stocks that would hold out in the long run. He said that such investors would not be hurt as badly as speculators who were interested in quick profits.
Others had varied opinions on what effects the huge drop in stock prices would have.
Anthony Redwood, executive director of the KU Institute of Public Business Research, said that he didn't know any special problems for Kansas that wouldn't happen elsewhere.
At the Kansas University Endowment Association, John Scarfle, director of public relations, said that it was too early to tell what the effect would be on the Endowment Association's holdings.
But he said also that Kansas could be hard hit, along with the rest o the country, if the drop sparked panic that could lead to a recession.
Joseph Sicilian, chairman of the economics depriment, said that the market decline did not mean that a recession was starting.
A recession occurs when the nation's economy stops growing, and that happens when
Siellian said that investors probably were more concerned with a few looming problems with the economy, such as bank dollar and a growing trade deficit.
And Jack Gaummitz, professor of business, said that the drop was more a product of the emotions of the investors. Those emotions had managed to push the record to understand the economy didn't support it. Now, the researchers would overreach the other way, he said.
But he cautioned against speculating about the reasons for a decline.
U.S. ships fire on Iranian platforms
The Associated Press
MANAAM, Bahrain — U.S. warships destroyed two Iranian oil platforms in the Persian Gulf yesterday and Navy commandos raided a third.
Iran said the Americans had begun a "full-fledged war," to which it promised "a crushing response."
The Pentagon said no Americans were injured in Monday's operations. Teheran said the attack wounded 16 people, and 20 women" but did not mention fatalities.
President Reagan called the 85-minute attack "a prudent yet restrained response" to Friday's missile strike on a U.S. flagged tanker off Kuwait. The missile was thought to have been launched from Peninsula, which Iran had conquered in its 7-year war with Iraq.
The WhiteHouse said gunfire wiped out two platforms at one location, and Defense Secretary Caspar Willembs said the area was the Rostem oil platforms.
After some initial confusion, Teheran said the two platforms hit were at the Reshadat, or Raksham, field 75 miles east of Qatar and 60 miles from the Iranian coast. Raksham and Restam are about 20 miles apart.
The oil platforms, which have an underwater pipeline running to Iran's coastal Lavan island, are among many permanent drilling rigs in the central gulf. Iran is known to have used some for helicopter and armed speedboat attacks on commercial shipping.
The discrepancy between the Iranian and U.S. reports could not be explained except very detailed maps of the gulf, the two fields appear to be very close.
Before darkness fell, salvage tugs and other craft reported columns of
smoke rise from the offshore rigs. U.S. warships were warning other craft away from the area, shipping executives in the gulf said.
At 1:30 p.m., the four destroyers moved to within about 6,000 yards of the two platforms, said Fred S. Cline and the Pentagon's chief skimmers.
"Reshadat, Reshadat. This is the U.S. Navy. We will commence firing on your position at 140 hours. You must minutes to evacuate the platform."
Ten minutes later they broadcast a warning:
Gulf radio monitors said they overheard an Iranian voice saying, "U.S. warship, U.S. warship, let me evacuate the injured before you shoot again."
Iranians on the platforms were then seen scrambling into a small boat and sailing away from the area, Weinberzer said.
In Washington, Reagan, speaking briefly with reporters as he left to visit his hospitalized wife, was asked why he meant the two nations were at war.
An 85-minute barrage of 1,000 rounds of 5-inch gunfire destroyed the city.
The attack caused Iranian personnel to abandon another platform about five miles away from the site of the first attack.
The president defended the U.S. action, saying, "We thought it was an appropriate and proportionate air missile attacks on the freighters."
"No, we're not going to have a war
we're not they're not that stupid."
he shout back.
Reagan faulted reports that described the platforms as oil derricks.
Give it up!
Justin Haskell of Lawrence gives his dog, Penelope, a lesson in cooperation.
KU absent from list of top 25 colleges
By NOEL GERDES
The survey asked college presidents to select the schools that they thought offered the best undergraduate education. The presidents who ranked the top 10 schools in their category. There were nine categories.
Staff writer
The University of Kansas does not rank in the top 25 universities in the United States, according to a survey in the latest issue of U.S. News and World Report, which went on sale yesterday.
KU was one of 204 schools in the national university category. These are schools classified as major research institutions by the Carnegie Foundation for the Advancement of Teaching.
The magazine's list of top schools in each category was based on the percentage of college presidents that ranked a school in the top 10.
Paul Vizza, editorial publicity coordinator for U.S. News and World Report, said that he didn't know how many votes KU had received.
"If you didn't make the top 25, there's no way of telling." Vizza said. About 54 percent of the presidents of the United States category responded to the survey.
Jim Scaly, assistant to Chancellor Gene A. Budig, said that the chancellor's office had received two invitations over the summer to respond to the survey, but had declined both.
See SURVEY, p. 6, col. 1