A look back at memorable days on Wall Street

Published on NewsOK Modified: December 31, 2013 at 1:16 pm •  Published: December 31, 2013
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There were plenty of big moves on the stock market in 2013, and the causes of many of them could be traced back to Washington.

Investors dumped stocks when political gridlock brought the country perilously close to defaulting on its debt. They also fretted when Congress shut down the government rather than pass a budget. Likewise, markets shot higher when the dysfunction appeared to pass.

The Federal Reserve was also top of mind for Wall Street in 2013. The U.S. central bank's aggressive bond-buying program has pumped money into financial markets and kept long-term interest rates extremely low.

Trying to guess when the Fed would start winding down its $85 billion a month in bond purchases became the biggest parlor game of the year on Wall Street. In mid-December, the Fed finally gave its answer: Citing an improving economy, Fed officials said they would start to reduce the purchases in early 2014.

Here are some of the biggest gains and drops of the year in the Dow Jones industrial average, and what caused them.

The Biggest Gains:

— Oct. 10: Up 323 points. Markets soar after Republican leaders and President Barack Obama seem willing to end a 10-day standoff over fiscal issues that threaten to leave the U.S. unable to pay its bills.

— Jan. 2: Up 308 points. Stocks start the year off with a bang. Investors are relieved after lawmakers hammer out a last-minute budget deal to avert the "fiscal cliff" of sharp tax hikes and across-the-board spending cuts.

— Dec. 18: Up 293 points. When the Fed finally announces its decision to begin reducing, or "tapering," its bond purchases, investors rejoice, seeing it as a vote of confidence in the U.S. economy.

— June 7: Up 207 points. Investors are encouraged that hiring picked up in May, but not so fast that it might prompt the Fed to move quickly to reduce its economic stimulus. Analysts call the 175,000 job additions a "Goldilocks" number.



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