Market Swoon
What It Is:
A market swoon is an abrupt fall in the value of a market index.
How It Works/Example:
Derived from a term meaning "to faint" or "pass out," market swoon is a vernacular expression that describes a sudden and widespread loss in the value of stocks across an entire market.
A market swoon is generally characterized by a substantial interruption in trading combined with a high trading volume. An example of a market swoon would be a steep decline in the value of the S&P 500 Index.
Why It Matters:
Market swoons frequently occur in response to economic or political shocks (for example, interest rate increases and international conflicts). The market often recovers from a market swoon in a relatively short span of time.
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Cached on May 24, 2012, 10:29 am