Crash
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Crash
Dramatic loss in market value. The last great crash was in 1929. Some refer to October 1987 as a crash but the market return for the entire year of 1987 was positive.
Crash
A sudden, dramatic, and usually sustained drop in securities market prices. It may be followed by a steep economic downturn, like the 1929 Crash that precipitated the Great Depression. In order to prevent crashes from hurting investors too much at once, most exchanges mandate a cutoff point below which trading stops. For example, the by-laws of a stock market may say that if it loses 10% of its value in intraday trading, the exchange officials automatically stop trading. See also: Panic selling.
crash
A protracted major decline in the securities markets.
Crash.
A crash is a sudden, steep drop in stock prices. The downward spiral is intensified as more and more investors, seeing the bottom falling out of the market, try to sell their holdings before these investments lose all their value.
The two great US crashes of the 20th century, in 1929 and 1987, had very different consequences. The first was followed by a period of economic stagnation and severe depression. The second had a much briefer impact. While some investors suffered huge losses in 1987, recovery was well under way within three months.
In the aftermath of each of these crashes, the federal government instituted a number of changes designed to reduce the impact of future crashes.