The Dow's Long Vacation Ends and Digital Dominance Begins

On this day in economic and financial history. . .

American stock exchanges would not open on Oct. 12 from 1909 to 1953, in celebration of the Columbus Day holiday. On Oct. 12, 1954, the exchanges opened for business, but a Wall Street visitor would have had a hard time confirming it.

The New York Times reported: "Wall Street was a lonesome place yesterday. The Federal Reserve and other banks were closed. ... The New York Stock Exchange ... remained open but surrounding streets were almost deserted, nevertheless."

The Dow Jones Industrial Average (INDEX: ^DJI) finished Oct. 12, 1954 with a half-percent decline, its first real Oct. 12 drop since 1903, when the index closed down nearly 4% in the middle of a moderate recession. This occurred early in a fairly long period of market mediocrity that would last until the great bull run of the 1920s.

From Columbus Day 1908 to Columbus Day 1954, the Dow grew at an annualized rate of 3.3%, from a 1908 closing price of 81.49 to 1954's close of 359.57. Its annualized growth from 1954's Columbus Day to 2011's holiday was 6.3%. Wall Street's working for an extra day seems to have done the Dow some good.

Take a picture, it lasts longer
The iconic Polaroid Corporation filed for Chapter 11 bankruptcy on Oct. 12, 2001. Once considered an American economic bellwether, Polaroid found itself increasingly marginalized as digital cameras gained in popularity. The Times reported at the time that Polaroid had fallen from a 1998 high of $50 per share in 1998 to just $0.28 per share when trading was halted prior to the bankruptcy filing.

The rapid improvement in digital camera technology used in cell phones already threatens to make digital cameras a relic. Camera phones had already been introduced in Japan by the time Polaroid filed for bankruptcy, but it wasn't until 2009 -- two years after Apple (NAS: AAPL) introduced the phone that would later launch a billion Instagrams -- that digital camera sales began to decline. By that point, Nokia (NYS: NOK) , with 106 million smartphones sold in 2009, credibly claimed to be the world's largest digital camera manufacturer.

The final axe for film fell years later, when Eastman Kodak (PINK: EKDKQ.PK) filed for bankruptcy protection in early 2012. The venerable company had exited film manufacturing in 2003 and had since closed 13 manufacturing plants and laid off 47,000 employees. Its current efforts to become a printer maker and a patent licensor have yet to bear fruit.

Over 150 million smartphones were sold worldwide in the second quarter of 2012. By year-end, the digital camera industry may be lucky to sell 115 million units.

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