Stocks closed on a new level in Lingo: a correction. After tumbling last week, the S&P 500-stock index closed in that area on Thursday.
What is the stock market correction?
The correction is a 10 percent reduction in stocks from their latest peak. Since February 19, the S&P 500 has fallen 12 percent.
In some ways, 10 percent is a voluntary margin. But it often signals that investors have become more pessimistic about markets.
Does that mean stocks are going down further?
According to Yardeni Research, there have been 10 modifications to the S&P 500 over the past 20 years. The previous amendment ended December 2018.
Of these modifications, only two became bear markets:
Wait What is the bear market?
If the stock goes down by at least 20 percent, it is more severe in the market and generally more durable.
The last one lasted until March 27, when the financial crisis hit
The previous bear market happened during the dot-com boost. From the top of the market in March 2000 to the bottom of October 2002, the SSP 500 dropped 49 percent.