Stock market downturn of 2002

The stock market downturn of 2002 (some say "stock market crash" or "the Internet bubble bursting") is the sharp drop in stock prices during 2002 in stock exchanges across the United States, Asia, and Europe. After recovering from lows reached following the September 11, 2001 attacks, indices slid steadily starting in March 2002, with dramatic declines in July and September leading to lows last reached in 1997 and 1998. The dollar declined steadily against the euro, reaching a 1-to-1 valuation not seen since the euro's introduction.

Related Topics:
Stock market crash - The Internet bubble bursting - 2002 - Stock exchange - United States - Asia - Europe - September 11, 2001 attacks - Indices - March 2002 - July - September - 1997 - 1998 - Dollar - Euro

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This downturn can be viewed as part of a larger bear market or correction, after a decade-long bull market had led to unusually high stock valuations. In fact, some Internet companies (Webvan, Exodus Communications, and Pets.com) went bankrupt. Others (Amazon.com, eBay, and Yahoo!) went down dramatically in value, but remain in business to this day and have generally good long term growth prospects. An outbreak of accounting scandals (Enron, Arthur Andersen, Adelphia, and WorldCom) was also factor to the speed of the fall, as numerous large corporations were forced to restate earnings (or lack thereof) and investor confidence suffered. The September 11 attacks also contributed heavily to the stock market downturn, as investors became unsure about the prospect of terrorism affecting the United States economy.

Related Topics:
Bear market - Bull market - Webvan - Exodus Communications - Pets.com - Bankrupt - Amazon.com - EBay - Yahoo! - Accounting scandals - Enron - Arthur Andersen - Adelphia - WorldCom - Investor confidence - Terrorism - United States economy

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The International Monetary Fund had expressed concern about instability in United States stock markets leading up to the sharp downturn.

Related Topics:
International Monetary Fund - Instability

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The Nasdaq stock market peaked on March 10, 2000, hitting an intraday high of 5132.52. It eventually closed at 5,048.62 . The Dow Jones Industrial Average, an average of 30 large companies on the New York Stock Exchange, peaked on January 14, 2000. Its intraday peak was at 11,750.28 but closed at 11,722.98. A year later, is was largely unchanged with another peak of 11,337.92 (intra-day peak 11,350.05) on May 21, 2001.

Related Topics:
Nasdaq - March 10 - 2000 - Dow Jones Industrial Average - New York Stock Exchange - January 14 - May 21 - 2001

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From 1987 to 1995, the Dow Jones Industrial Average rose each year by about 10%. From 1995 to 2000, the Dow rose 15% a year. A bear market began in 2000; by July/August 2002, the Dow dropped to the same level it would have been if the 10% annual growth rate it followed during 1987-1995 had continued up to 2002.

Related Topics:
1987 - 1995 - Dow Jones Industrial Average - Bear market

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After falling for 11 consecutive days and reaching a low below Dow 8000 on July 23, 2002, the market rallied, rising 15% over the next four trading days rising to over Dow 9000 during August. Indices fell sharply again on August 2 and 3. On August 5, stocks continued their decline, Nasdaq breaking the July 23 low. The markets rose sharply over the rest of the week.

Related Topics:
July 23 - Nasdaq

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