AT&T Inc. (T), Union Pacific Corporation (UNP) – Connected Computing: From Modern Marvel to Stock-Crash Scapegoat

This is one of the earlier examples of networked computers — one legacy of ARPANET and connected computing — taking the blame for a big stock-market drop. But the Dow Jones Industrial Average (INDEXDJX:.DJI)’s closing value of 1,792.89 points wouldn’t even be a low for the coming year. The index soon rebounded to a 1987 high of 2,722.42 points — a 51% gain — by the following August. However, when Black Monday struck in October of 1987, the Dow returned to 1,738.74 points after losing 23% of its value in a single session. Many investors also blamed that massive crash on computerized trading, which has since become a common scapegoat for investors looking to find the reason for an unexpected plunge.

Bridging the continent
The Union Pacific Corporation (NYSE:UNP) and Southern Pacific railroads completed their $5.4 billion merger on Sept. 11, 1996. The two companies each had their roots in the Transcontinental Railroad, which had been completed more than a century earlier. Union Pacific Corporation (NYSE:UNP) had been established specifically to help construct the Transcontinental Railroad by building westward from the Mississippi; Southern Pacific, although formed before the Transcontinental Railroad project, had merged in 1959 with the Central Pacific Railroad, which had built eastward from California to meet Union Pacific Corporation (NYSE:UNP) in 1869.

This was actually Union Pacific Corporation (NYSE:UNP)’s second attempt to gain control of the Southern Pacific: A 1901 acquisition was undone by trust-busters in 1913. The 1996 effort has held up without raising the ire of government regulators, and Union Pacific Corporation (NYSE:UNP) is now the largest independent railroad company in the United States, when measuring by both annual revenue and total route length.

The article Connected Computing: From Modern Marvel to Stock-Crash Scapegoat originally appeared on Fool.com and is written by Alex Planes.

Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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