The 1990s marathon

The longest and strongest bull market in Wall Street history had its genesis in October 1990, smack dab in the middle of an eight-month recession.

Just like today's economic malaise, the recession between July 1990 and March 1991 featured a declining real-estate market, nervous banks that had tightened loan criteria to limit their exposure to bad debts, and a Middle East conflict. A restrictive monetary policy led to the slowdown, but it was Iraq's invasion of Kuwait and the subsequent surge in oil prices that tipped the balance.

A bull market began to emerge when the Federal Reserve went on a rate-cutting frenzy, lowering the overnight federal funds rate 18 times from 8%25 in July 1990 to 3%25 in September 1992. Ultimately, the recession turned out to be relatively shallow, but Wall Street's optimism lasted almost eight years and sent the Dow up 295%25.

Recession span: July 1990 to March 1991 (eight months)

Peak unemployment: 7.3%25 in December 1991

Bull run: The Dow gained 294.8%25 from Oct. 11, 1990, to July 17, 1998 (2,836 days).

Photo Credit: National Archives

War, peace and 1950s prosperity

Wars are great disrupters on Wall Street, and such was the case with the Korean War. When the conflict began, in 1950, the Dow took a steep and sudden fall -- until defense contracts started rolling in.

By January 1953, when President Dwight D. Eisenhower took office, peace talks were under way and the war-powered economy and tag-along bull market were running out of steam. The recession that began in July 1953 was called a "rolling readjustment to a peacetime economy." But investors didn't need too much time to readjust.

The Dow hit bottom in September 1953 and then started a nearly three-year rally that lifted it 104%25. Interest-rate cuts rejuvenated the economy and supercharged investors, who jumped back into old favorites like railroads and utilities and discovered new winners like Disney and Xerox.

Recession span: July 1953 to May 1954 (10 months)

Peak unemployment: 6.1%25 in September 1954

The Dow gained 103.9%25 from Sept. 14, 1953, to April 6, 1956 (935 days).

Photo Credit: National Archives

A mid-1970s reflex rally

In 1975, all the pent-up frustration with the market's previous two years exploded into a buying frenzy. In January, the market recorded its best monthly gain in 36 years, powered by several prime-rate cuts and intense bargain hunting. By mid-July, the prime rate had been cut a dozen times and the Dow had jumped more than 50%25 from its lows the previous December.

The buying was a reflex reaction to the disaster of 1974, when inflation, sparked by an OPEC oil embargo, pounded the economy and sent the Dow into a 27.6%25 tailspin -- its worst performance since the Great Depression.

On the whole, 1974 had been a nightmare. The Watergate scandal had finally forced President Richard Nixon to resign, interest rates were high and Americans were fed up with gas lines and price gouging. They were ready to turn the page on the past.

Recession span: November 1973 to March 1975 (16 months)

Peak unemployment: 9%25 in May 1975

Bull run: The Dow gained 75.7%25 from Dec. 6, 1974, to Sept. 21, 1976 (655 days).

Photo Credit: Reagan Library

The 1982 buying panic

By August 1982, investors were a bruised and bloodied bunch. The oil shocks of the 1970s led to double-digit inflation that Federal Reserve Chairman Paul Volcker treated with tight monetary policy. The economy fell into its longest recession since World War II.

On Aug. 12, 1982, the Dow closed at 776.92, just about where it had been in January 1964. But things were about to change.

A swift and sudden easing of interest rates ignited a powerful bull run. From its August low, the Dow tacked on 270 points through the end of the year, closing with a 19.6%25 gain for 1982. The next year, disarray among OPEC members and the promise of interest-rate stability kept the bull running, and the Dow ended with another 20%25 gain.

Recession span: July 1981 through November 1982 (16 months)

Peak unemployment: 10.8%25 in December 1982

Bull run: The Dow gained 65.7%25 between Aug. 12, 1982, and Nov. 29, 1983 (474 days).

Photo Credit: White House Photo Office

The Vietnam conundrum

The first half of 1970 brought a boatload of trouble. Overseas it was the Vietnam War and the invasion of Cambodia. At home there were student riots, record deficits and a recession that had begun in December 1969 when policies to combat inflation tipped the economy. The failure of several brokerage houses -- resulting in a new law to safeguard investors -- didn't help confidence.

In January 1970, the Dow fell 7%25.ÊBy May, panicky investors pushed blue chips to a low of 631.16.

The recession did not end until November 1970, but by then Wall Street was on a speculative streak, with investors charging into stocks such as Winnebago and Bausch & Lomb. The bull market lasted almost a year, until April 1971, when the Dow topped out at 950.82, a 50%25 run.

Recession span: December 1969 to November 1970 (11 months)

Peak unemployment: 6.1%25 in December 1970

Bull run: The Dow gained 50.6%25 from May 26, 1970, to April 28, 1971 (337 days).