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Quote of the Day
“Investigate, then invest.”
– The motto for Merrill Lynch when it was founded in 1922. The firm would experience it’s last day as a independent company on this day in 2008.
Significant Stock Market Events on September 14
September 14, 1901 – President McKinley’s Death Sparks Market Panic
On this day in 1901, U.S. President William McKinley succumbed to wounds from an assassin’s bullet eight days earlier.
The president’s death thrust Vice President Theodore Roosevelt into the White House and created political uncertainty. As news spread that day, the stock market suffered a sharp sell-off, with major indices falling roughly 5% amid investor anxiety.
The death of McKinley of course rattled Wall Street in the short term, though markets later stabilized once Roosevelt’s assertive policies became clear. U.S. stocks would stay steady over the next year, before falling sharply in the “rich man’s panic” in 1903:
September 14, 1960 – Birth of REITs Opens a New Asset Class
On this day in 1960, President Dwight Eisenhower signed into law the Real Estate Investment Trust Act.
This legislation created Real Estate Investment Trusts (REITs), allowing everyday investors to own shares in income-producing real estate portfolios for the first time. By granting REITs a special tax status if they pay out most income as dividends, REITs became a very popular investment for those looking for income and real estate exposure from their investments.
The first REITs launched soon after, opening the door for small investors to invest in commercial properties, shopping centers, apartments and more.
September 14, 2007 – Run on Northern Rock Signals Global Credit Crisis
On this day in 2007, panicked customers flooded branches of Northern Rock, a British bank, in the first major bank run the UK had seen in over a century.
The previous evening, Northern Rock had revealed it sought emergency funding from the Bank of England due to severe liquidity problems. When markets opened on the 14th, news of the bank’s distress triggered mass withdrawals of over £1 billion in a single day. Long lines of worried depositors wrapped around Northern Rock offices, fearing the bank would become insolvent.
The run forced the British government to eventually step in with deposit guarantees and, by early 2008, fully nationalize Northern Rock.
This incident was one of the earliest signs of the unfolding global financial crisis, a full year before the collapse of Lehman Brothers.
September 14, 2008 – Bank of America Rescues Merrill Lynch
The same day Lehman was collapsing, another drama unfolded: Merrill Lynch, fearing a similar fate, hastily agreed to be acquired by Bank of America.
In a deal brokered in less than 48 hours, Bank of America announced it would buy Merrill for $50 billion in stock, rescuing the nation’s largest brokerage from potential bankruptcy. Merrill Lynch had been reeling from mortgage-related losses and saw its shares plummet – the firm was on track to run out of capital within days.
The essential failure of one of the most storied firms in Wall Street history stunned investors around the world.
Shareholders ultimately approved the sale, though Merrill’s losses later forced additional government aid to BofA. By averting Merrill’s collapse, this takeover prevented an even deeper market panic at the time.
It also signaled the end of an era. After that weekend, no major independent investment banks remained aside from Goldman Sachs and Morgan Stanley (both of which soon converted to regulated bank holding companies).
September 14, 2019 – Attack on Saudi Oil Facilities Shocks Energy Markets
On this day in 2019, drone attacks hit Saudi Arabia’s Abqaiq and Khurais oil processing facilities, crippling about 5.7 million barrels per day of output – roughly 5% of global oil supply. This was one of the largest supply disruptions in history.
The immediate effect when markets reopened was oil prices skyrocketing: on Monday Sept. 16, Brent crude futures spiked over 14% – the biggest single-day jump in a decade. Energy stocks rallied on the news, while industries dependent on fuel (like airlines) braced for cost surges.
Saudi officials reassured markets that production would be restored quickly, and within weeks output resumed, causing oil prices to retreat. Still, the event rattled investors worldwide, demonstrating how a few well-placed drones could roil global markets in an era of complex supply chains.