Did stocks "crash”? Some news organizations and investors are hesitating to use the word to describe Wall Street’s terrifying sell-off. A crash is commonly defined as a 20 percent decline in a single day or several days. The drop over the seven days ending Thursday lopped 20.9 percent off the Dow Jones industrial average, which would qualify as a crash. On Friday, the Dow fell again, bringing the cumulative loss to 22 percent. "This quick, this amount, in these few days, obviously is a crash,” said Howard Silverblatt, senior index analyst at Standard & Poor’s. "The crash deals with the speed as well as the intensity of it.”
‘Slow-motion crash’CNBC host Dylan Ratigan was among those uttering the word on Thursday, calling the decline "a cascading crash.” The Wall Street Journal, the most influential publication in the financial world, hedged somewhat on Friday’s front page, saying the scary drop over the past several days "amounts to a slow-motion crash.” But not everyone was prepared to go that far. The Associated Press did not use the word "crash,” referring to Thursday as a "runaway train of a sell-off.” "A car crash is sudden, and this is over eight days,” said AP Business Editor Hal Ritter. "You can argue either way, but it’s better to give readers the important numbers for this week, 1987 and 1929, so they have the perspective to make their own judgments.” While The New York Times’ news columns called Thursday’s trading a "rout” in which "panicky investors dumped stocks en masse” in a "stomach-churning 90 minutes” at the end of trading, the paper carefully avoided the word "crash,” saying the 20.8 percent decline over six trading days "is similar to the drop in the Dow on Black Monday, Oct. 19, 1987.” (And that, of course, is a day most people refer to as a crash.)
Avoiding a panicOne reason news organizations hesitate to use the word: They are afraid of causing panic. "Nobody wants to be blamed for making things worse than they are,” said Edward Yardeni, who runs his own economic research firm. "You can probably watch CNBC all day and find that almost no one used the word ‘crash’ or ‘depression.’ You’ll see it more often. It is a stock market crash and it has the potential to create a depression.” The word "crash” is so linked to the market’s 1929 plunge and the images of bread lines, shantytowns and hungry children in the ensuing Great Depression that some investors hesitate to use it even to describe 1929.