The Dow Drops With War on the Horizon
On this day in economic and financial history...
The Dow Jones Industrial Average suffered a sharp break on Jan. 23, 1939 as nervous Europeans pulled out of the American market. The cause of their skittishness could be found in Germany's increasingly warlike stance, which had in a single day subsumed the German Wehrmacht (military) into the Nazi party and forced economist and Reichsbank president Hjalmar Schacht, who opposed re-armament, out of his position. Adolf Hitler was also quoted in the press as demanding that Czechoslovakia -- already partly ceded to Germany as a means of appeasement mere months earlier -- renounce its pact with Russia and more closely align with the German-led military alliance now known as the Axis powers. The appeasement had given rise to the infamous "peace for our time" statement from British Prime Minister Neville Chamberlain, which was already starting to look quite foolish by the early days of 1939.
The Dow dropped 5.2% that day, with steel and automotive stocks faring the worst. Bellwether industrial U.S. Steel dropped 7%, which was one of the worst performances among major Dow components, though it was partly attributed to general weakness in "light" steel-product prices. Caterpillar , already a notable tractor manufacturer, also reported a major decline for the 1938 year on Jan. 23, with net income dropping from $10.2 million to $3.2 million on sales that slid from $63.2 million to $48.2 million. However, the German Boerse stock market was a rare standout in the global slide (British and French markets finished lower), with many shares ending the day in positive territory.
The Dow's drop on Jan. 23 would prove to be a warning for eagle-eyed investors. Within two months, the Wehrmacht moved into the rest of a weakened Czechoslovakia, and Hitler declared it a German protectorate. In September of 1939, the German and Soviet armies invaded Poland in the first military action of World War II. The Dow was already in the grip of one of several Depression-era bear markets, the last of which did not conclude until the spring 1942, years into the war and well after America's entry. By this point, the Dow had declined 34% from its close on Jan. 23, 1939, and it would not surpass that day's closing level of 141.32 points for good until the spring of 1944, shortly before the D-Day offensive.
Whatcha gonna do, brother?
Millions of young boys found a new hero on Jan. 23, 1983, when Hulk Hogan defeated the Iron Shiek for his first World Wrestling Entertainment title. This was the beginning of a four-year championship reign for the Hulkster, during which he headlined the first three WrestleMania pay-per-view events and helped build the WWE from one of many regionally focused pro-wrestling promotions into a national entertainment brand. Hogan would remain a top star in professional wrestling for two decades and was a major part of the later "Monday Night Wars" that eventually led to WWE's consolidation of the pro-wrestling industry.
Do you speak Java?
The first stable version of the Java programming language was released on Jan. 23, 1996. Created by a team of engineers (the "Green Team") led by James Gosling at Sun Microsystems, Java was designed from the ground up for what was envisioned as the eventual union of digital consumer devices and home computers. This prescience has made Java a popular programming language on the Internet, which now spans billions of devices of all shapes and sizes. More than 9 million programmers are part of the Java development community, according to Oracle , which is now the primary developer of Java as a result of its acquisition of Sun in 2010.
A fire in the desert
On Jan. 23, 1991, reports began to trickle in that Kuwaiti oil installations had been set aflame by the Iraqi army as it retreated under pressure from the international coalition behind Operation Desert Storm. The Iraqis had set mines around active Kuwaiti oil wells, stymying any effort to quickly bring the fires under control. Early estimates predicted that 540,000 tons of soot would be released into the air in the first month alone.
For the remainder of 1991, thick, noxious clouds of smoke and soot billowed from the burning oil fields as international crews struggled to assess and mitigate the damage. In the Persian Gulf, a slick of crude that spread from a damaged Kuwaiti loading terminal surpassed the size of the Exxon Valdez spill of 1989 within hours. An international team of contractors led by privately held Bechtel extinguished the last of the fires by November of 1991, but the toxic oil lakes that dotted the Kuwaiti landscape continued to pose problems more than two decades later.
The Kuwaiti sabotage remains by far the worst oil-related ecological disaster in history. More than 650 oil wells were set ablaze, and another 75 were damaged. Between 1 billion and 1.5 billion barrels of oil fouled the environment before the fires and spills had been brought under control, with up to 40 million barrels spread across the desert sands and another 11 million dumped into the sea. This represented a direct economic loss of nearly $18 billion at the prevailing price of oil in the latter months of 1991. Secondary effects, including environmental and health damages, are likely to have raised the total cost of the disaster by an order of magnitude or more.
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