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Stock Market Index A stock market index is a listing of stocks, and a statistic reflecting the composite value of its components. It is used as a tool to represent the characteristics of its component stocks, all of which bear some commonality such as trading on the same stock market exchange, belonging to the same industry, or having similar market capitalizations. Many indices compiled by news or financial services firms are used to benchmark the performance of portfolios such as mutual funds.
Stock Market A stock market is a market for the trading of publicly held company stock and associated financial instruments (including stock options, convertibles and stock index futures).
Trading: Traditionally, stock markets were open-outcry where trading occurred on the floor of a stock exchange. Most modern stock trading is done in electronic exchanges where buying and selling occurs via online real-time matching of orders placed by buyers and sellers.
Stock Market Crash A stock market crash is a sudden dramatic loss of value of shares of stock in corporations. Crashes are driven by panic as much as by underlying economic factors. They often follow speculative stock market bubbles such as the dot-com boom.
Stock Market Bubble A stock market bubble is a type of economic bubble taking place in stock markets, in which a wave of public enthusiasm, evolving into herd behavior, causes an exaggerated bull market . When such a bubble takes place, market prices rise dramatically, making the listed stocks significantly overvalued. Generally stock market bubbles are followed by stock market crashes.
Examples:
Stock Market Downturn Of 2002 The stock market downturn of 2002 (some say "stock market crash") is the sharp drop in stock prices during 2002 in stock exchanges across the United States 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.
Stock Markets In The United States Since the stock market crash of 1929, brokers on American exchanges have had the obligation to assure an orderly and fair market by intervening when the price of a stock seems to be rising or falling too fast. See Stock market for practical discussion of what is bought and sold and how.
Election Stock Market Election Stock Markets are financial markets in which the ultimate values of the contracts being traded are based on the outcome of elections. Participants invest their own funds, buy and sell listed contracts, earn profits and bear the risk of losing money. Election Stock Markets function like other future exchanges, such as commodity exchanges for the future delivery of grain, livestock, or precious metals.
Correction (Stock Market) In stock market terminology, a correction is a short-term reduction in stock market price or activity. A correction counteracts steep rises and brings overpriced stocks back down to fair value. If markets rise as a whole and fall dramatically, this called a "correction within an upward trend".
Wall Street considers a stock market index to be in a correction when it is down 10% from its starting level for the year.