Since being established early in the 20th century, the Dow Jones Industrial average has grown to include some of the world’s most important stocks, which makes it one of the main indicators of the health of the United States economy.
On this day, April 7th in 2008, the Dow Jones Industrial Average closed at an all-time high of 14,164. Unfortunately, the high average was reached thanks in part to a questionable practice by the country’s major banks, known as sub-prime lending. Sub-prime loans created a housing bubble in the United States that was in very real danger of bursting.
Once the United States housing bubble burst at the end of 2008, the nation’s economy went in a downward spiral, ultimately leading the country into a recession. After enjoying a record-high Dow Jones average in April, the average reached a 12-year low in March of 2009. It would take several years for the U.S. economy, and the Dow Jones Industrial average to recover from the recession.