New York Times business editor Larry Ingrassia responded to a reader’s question about how the paper decided how to characterize moves in the stock market.
Ingrassia writes, “But there is no easy definition when it comes to crash, either. When the Dow Jones Industrial Average, uh, went down 22.6 percent on Oct. 19, 1987 â€” Black Monday â€” The Times eschewed the word, instead reporting: ‘Stock market prices plunged in a tumultuous wave of selling yesterday, giving Wall Street its worst day in history and raising fears of a recession.’ The Wall Street Journal, less restrained, wrote simply: ‘The stock market crashed yesterday.’
“On the other hand, I do think it is appropriate to refer to a long-term, high-double-digit decline â€” like the 50 percent or so drop in stocks from their peak in the fall of 2007 to the low point in March of this year â€” as a crash, though we might qualify it as a creeping or slow-motion crash.
“But in the end, the choice of word is a matter of judgment. I think itâ€™s O.K. to say that the market plunged if the drop is, say, 8 percent or more in a single day, and I certainly would excise it from an article if the market dropped less than that, especially if it was 5 percent or less. Ditto for plummet (which in my mind is akin to a plunge, although maybe not as steep, though Iâ€™m sure others would differ).
“One of my colleagues points out, though, that it is appropriate in some cases to say the stock market plunged in rare instances even if it ended positively for the day. How can that be? Well, what if the market was up 6 percent at 3:45 p.m., and ended up only 0.1 percent when trading closed 15 minutes later? A drop-decline-fall (words that I think can pretty much be used interchangeably) of 5.9 percentage points in 15 minutes is so steep that it warrants a strong verb to describe the velocity of the drop.”
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