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Dow drops 1,147 points over three trading days. Is that a 'crash'?

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Instead, the falling markets resulted in yet more selling, which basically snowballed as computer-generated trades kept pressure on the market the entire day. “The only thing that kept the market from melting down even more was the closing bell,” recalls Mr. Dickson.

The next day the Federal Reserve Bank stepped in, reducing interest rates. The stock market reversed itself, moving higher.

Oct. 28 and 29, 1929. On Monday the 28th, the stock market fell 12.82 percent and then dropped another 11.73 percent the next day. The stock market of the 1920 had a lot of “wild West” in it, with little supervision over trading. The public had become enthusiastic buyers of stock, using “margin,” or borrowed money, to finance their purchases. Thus, when the market dropped sharply – in an era when stock prices were not instantaneously known – the public lost most of their savings. This lead to the Great Depression and, eventually, to reforms such as the formation of the Securities and Exchange Commission.

Sept. 17, 2001. After the 9/11 attacks, the markets were closed for three days. When they reopened, investors were unsure of what the attack might mean to consumers. Would they stop buying cars and houses? Would the US economy go into a recession?

The market decline that day of 684 points, or about 7.1 percent, was part of a larger decline of about 20 percent over a month. By March 2002, it had made back all the losses. But then the Enron scandal hit and the so-called “Internet bubble” exploded, resulting in a two-year stock-market decline. The economy slipped into recession.

The financial market debacle of late 2008. The stock market had some bad days as the housing bubble burst and the entire financial system seemed to be on the verge of collapse. On Sept. 29, 2008, the Dow fell 777.68 points, or 6.98 percent. On Oct. 9, it dropped another 678 points, or 7.33 percent. Then, on Dec. 1 it lost another 679.95 points, or 7.7 percent. The economy went into a recession in December 2007, which lasted until June 2009.

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