It was about 6:30 a.m. Tuesday when stock trader Sy Leopold, peering through tinted lenses across the vast floor of the Pacific Stock Exchange, shouted his first order of the day: "Peppie, 500 hamburgers to go!" Somewhere out there, an investor had just unloaded a chunk of McDonald's.
Leopold, who at 52 has been riding the stock market roller coaster for 31 years, had arrived at the exchange an hour earlier. Worn out after Monday's record selling spree, he had gone to bed exhausted, but long before dawn was no longer able to sleep.
At 3 a.m., while his wife and three daughters were still fast asleep in the Leopolds' Arcadia home, he had gotten up, read the newspaper and played an electric backgammon game before heading downtown.
About the time that Leopold was selling off 500 hamburgers, the first news from Wall Street was hitting computer screens at the Pacific Stock Exchange on South Beaudry Street. It was good news: A powerful buying surge that suggested a strong recovery from Monday's 508-point drop that wiped out $503 billion of stock equity--almost a quarter of the Dow's value.
But Leopold, a trader for Blackmore and Co. Inc., one of a group of brokerage houses that call themselves "$2 brokers" because they buy and sell stock for clients on orders from other brokerage houses, was not convinced.
"Anyone who says he knows what's going on is full of it," Leopold said as he scanned the big room with its institutional pastel walls, huge display boards and banks of computer terminals.
Life in a 'Stress Business'
He added, "I just take it day by day. It's bad enough, being in a stress business." Indeed, Leopold, slightly overweight at 6 feet 2 inches, has recently suffered two angina-like bouts. On doctor's orders, he gave up cigarettes and alcohol cold turkey four years ago.
After less than an hour of trading, the market was up more than 95 points above Monday's close and traders on the floor began to speculate that Monday's damage would be undone, that fears of a 1929-like depression were unwarranted.
One man on the Pacific Exchange floor Tuesday had a unique perspective on that. Jack Sillick, 79, who retired as a stockbroker in 1973 but couldn't stand idleness and came back to work as a clerk, had been a brokerage house clerk in 1928, a year before he graduated from high school. By Oct. 28, 1929--when the Dow lost almost 13% of its value, ushering in the Great Depression--he was an experienced stock market hand.
Jim Sams, a 31-year-old broker, ambled over to Sillick's desk as trading progressed and said, "Jack, you've seen two of these in your lifetime. . . ." But Sillick was not ready to concede that this was a repeat of history.
He spoke of how computers and other modern trading tools have removed emotion from stock trading. Further, he said, people today seem to be able to accept "this kind of disruption" in their lives more readily than they did in the late 1920s.
But was this The Big Crash once again? "We are just going to have to wait and see," he said.
Nine o'clock at the stock exchange and there was more news from Wall Street: The Dow Jones industrial average, which had bounced back with a gain of 175 points in the first 90 minutes of trading, had dropped 28 points on a volume of 333 million shares.
About this time trader Craig Kievman walked onto the cavernous floor of the Los Angeles exchange, thrust his hands out to his sides and, in a reference to the recent conversion of the old Pacific Stock Exchange headquarters on Spring Street into a restaurant and nightclub, exclaimed, "Maybe they should turn this place into a nightclub!"
Others Break Into Laughter
Other brokers broke into laughter. It was a small moment of levity in a day that had started on an optimistic note but was quickly deteriorating.
For many of the young brokers, those in their 20s and 30s who were accustomed to seeing their investments turn to gold, Monday's crash had been devastating. Leopold pointed to one young man, noting that he had lost $500,000 in the last two days.
Leopold shrugged. "We've had five good years. Everybody made a lot of money. They're paying it back now."
Like Sy Leopold, others in the stocks and bonds business had not slept well Monday.
After Monday's trading, John Oppenheim, a branch manager for Dean Witter Reynolds in Woodland Hills, had observed that one client, whose account reflected a margin balance of several hundred thousand dollars, "is probably going to be wiped out."
Tuesday morning, Oppenheim was still trying to reach the client, who was vacationing in Northern California and hadn't yet been told. "It's really depressing," Oppenheim said.
By 10 a.m. in Los Angeles, the price of an average share on the New York Stock Exchange was down 7 cents, reflecting a modest comeback from Monday but a leveling off from the mid-morning resurgence. Losers led gainers 1,483-to-384 among the 1,984 issues crossing the NYSE tape.
Going 'Step by Step'