Correct Lingo

Chris Roush
October 17, 2008

With the dramatic gyrations in the stock market this past month, there have been more than a few conversations in business journalism circles about the verbs that we use to describe what the market did on a certain day.

For example, when it is appropriate to call the market’s drop a “crash” instead of a “drop?” And what are the degrees of separation in between?

To give you an idea of the uncertainty among some business reporters, here’s the text of an actual e-mail I received earlier this month from someone in the industry:

“Don’t want to incite panic, but I would like an academic opinion on this. Would you call down [less than] 10 percent a crash?”

My response: “I would call it a ‘correction.’ A crash is the 86-percent drop that we experienced in this country from October 1929 to 1933.”

So, it got me to thinking – shouldn’t there be some sort of handy, dandy chart for business journalists, particularly those who write about the market, on what verbs to use for certain drops and rises?

And here it is. Note that this is based on percentage declines or rises, and not points. It’s the percentage decline that’s important.

1 percent drop or less: Fine to use “fell” or “dropped,” as well as “declined.” And I’m even OK with “moved downward.”

2 percent to 4 percent decline: I’m still OK with any of the above, as well as “dipped” and “slumped,” which to my ear are slightly more serious grades of a fall.

5 percent to 10 percent decline: “sell-off” and “rout” seem to be appropriate here, as does “retreated.” Obviously, based on what I stated above, “correction” can also be used. On Wednesday, Oct. 15, the market “retreated” by 7.87 percent.

Drop of 10 percent or more: Only here do I believe that the term “crash” is correct. The stock market fell by 12.8 percent on Oct. 28, 1929, the first day of the decline that led to the Great Depression. “Crash” needs to convey the suddenness of the move. On Oct. 19, 1987, the market “crashed” when the Dow Jones Industrial Average fell 22.6 percent that day.

And multi-day drops that total more than 10 percent would also equal a “crash” as long as it’s clear that the term refers to more than one day.

Here are the increases:

Rise of up to 1 percent: “Increased” and “advanced” seem to be the most common terms. “Gained” is good as well.

2 percent to 4 percent increase: Again, I think “gained,” “increased” or “advanced” is fine here, as are “rose” and “grew.”

5 percent to 10 percent increase: “Jump” and “soar” are appropriate here.

10 percent or more: “Surge” seems to be the best antonym for “crash.” When the Dow rose by 936 points on Oct. 13, it rose by 11 percent, the fifth-largest percentage gain in the market’s history. The market has only had six, one-day “surges” in its history.

I’m open for suggestions or additions to this list, so fire away. Obviously, the semantics here can be argued. And using qualifying words ahead of those above can result in even more specificity.

Anyone ready for a “surging crash?”

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Copyright © 2008 Donald W. Reynolds National Center for Business Journalism