A stock market crash is a sudden dramatic loss of value of shares of stock in corporations. Crashes are driven by panic as much as by underlying economic factors. They often follow speculative stock market bubbles such as the dot-com boom.
The most famous crash in 1929, (known as Black Thursday) when the Dow Jones Industrial Average dropped 50%, preceded the Great Depression. The succeeding years saw the Dow Jones drop a total of over 85%. Richard Armour, in his satirical American history book It All Started With Columbus, remarked that the 1929 crash occurred "near the corner of Dun and Bradstreet".
There was also a crash or "adjustment" on Monday October 19, 1987, known in financial circles as Black Monday, when the Dow Jones lost 22% of its value in one day, bringing to an end a five-year bull run. The FTSE lost 10.8% on that Monday and a further 12.2% the following day. The pattern was repeated across the world.
The stock market downturn of 2002 was part of a larger bear market that took the NASDAQ 75% from its highs and broader indices down 30%.
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