Changes

Throughout the late 19th century and early 20th century, stock markets became more directly linked with the major companies in countries, which were often rail, coal, and steel industries. Financing came from stock exchanges and company success began to depend on increasing growth of stock values. This increasingly also made the economy vulnerable to panic selling and there was no regulation to stop runaway selling. The Black Thursday and Black Tuesday crashes of October 24 and 29, 1929 are widely seen as the triggers for the Great Depression of the 1930s. These were examples of panic selling that greatly reduced financial flows to major companies. To prevent panics such as these major crashes, new rules were introduced in the 1930s and the creation of the U.S. Securities and Exchange Commission in 1934 helped regulate financial markets around the country, in particular the New York Stock Exchange. The Great Depression also demonstrated that the global economy, and not just the economy of the United States, began to become more linked so that panic selling in one stock market began to affect other stock markets and economies. Markets such as London and New York, with now both these exchanges increasingly playing a dominant role in the global economy, had also began to use stock exchanges to invest in other countries' businesses. This created some of the links that led to the panics and triggers in other countries that precipitated a global depression in the 1930s. The 1980s saw new innovations such as electronic trading and by the 1990s electronic trading services made trades almost instantaneous, a far cry to the pre-1980s system where open calls and shouting were used as the main way in which trade was conducted.  Throughout the 20th century, the main trend has been increased expansion of the stock market in the wider economy, where it even touched average consumers since the World War II era. In the United States and some developed economies, pensions and retirement funds are typically invested in stock markets. This has not only increased the level of funding in stocks, but it is now seen as a standard way in which to manage one's retirement as average life expectancy progressively increased in the 20th century. As stock markets have spread and increased to most countries today, their main purpose has not shifted greatly. Stock markets are mainly seen as a way for companies to raise funding and trade debt. More regulation increased after the 1930s; however, deregulation occurred once again in the 1980s that made stock transactions not only easier but put fewer limits to markets.