Wall Street: where fortunes rise and fall
The first President of the United States, George Washington, made his first inaugural address there. The first US Congress met there. The nation's first government offices were there.
If you guessed Philadelphia, Washington, or Boston, you're wrong.
It's New York's Wall Street.
Wall Street owes its name to Peter Stuyvesant, the governor of the small settlement of Dutch colonists who settled New Amsterdam. New Amsterdam is the original name for New York City.
Governor Stuyvesant ordered a wall built in the Lower Manhattan area in 1632 to help keep enemies out. By 1699, the wall had completely disappeared, but the name stuck.
Today, Wall Street refers to a specific area of towering buildings and narrow streets, including Wall Street itself, that makes up the financial district of New York. Sometimes Wall Street refers to the entire financial community in the United States.
Both the New York Stock Exchange and the American Stock Exchange are based in the financial district in Lower Manhattan. This makes Wall Street the national headquarters of the securities industry.
Another name for securities are stocks and bonds.
The securities business serves two main purposes:
1. Companies obtain money from people to help run and expand their businesses by selling stocks and bonds.
2. People put their money into these businesses in the hope their money will grow.
Those who put their money - or invest their money, as they say - in stocks and bonds are called investors.
When the company is successful and makes profits, it sometimes shares these earnings with its investors. Profits divided up in this way are called dividends , which are usually mailed out four times a year.
When the investor puts his money in a company he shares ownership of that company. Therefore the investor is also known as a shareholder.
To prove this he is given a share or stock certificate. These stock certificates show how many shares have been bought. They can be bought in any amount from a few to thousands, even millions.
When you buy or sell shares you don't usually deal directly with the company or another investor.
Shares are bought and sold through a middleman called a stockbroker. A broker charges a fee for his services. This fee is called a commission.
Every weekday, millions of shares are traded (that is, bought and sold) on the stock exchange. Among other busy stock exchanges in the world are the London Stock Exchange, the Paris Bourse (''bourse'' is French for purse), and the Tokyo Stock Exchange.
Investors all over the world closely watch their newspapers and television sets to see how their stocks or investments are doing.
There is a measurement called the Dow Jones industrial average, which tells whether on average the stocks of 30 important industrial companies are going up or down in value. The Dow Jones usually tends to signal the health of the stock market as a whole - whether it is up or down. The Dow Jones gets its name from the founder of Dow Jones & Co., which publishes the Wall Street Journal. This is a newspaper devoted mainly to business news.
Then there are bears and bulls. Bears are investors who expect stock prices to go down. Bears are pessimists in the stock market. Bulls are the opposite. They are optimists. They expect prices to go up.
As a result, we often refer to investors, depending on whether they expect prices to rise or fall, as being bullish or bearish.
On April 24 this year, the Dow Jones climbed to 1,020.35 points. This was the highest level it had been in eight years. It was clearly a market for bulls. The market has since moved the way of the bears. On Sept. 25, it fell to its lowest point in 16 months - to 824.01.
Things could change just as suddenly and bring the bulls back if the outlook for the market is good.