|The stock market downturn of 2002 (some say "stock market crash" or "the Internet bubble bursting") is the sharp drop in stock prices during 2002 in stock exchanges across the United States, Canada, Asia, and Europe. After recovering from lows reached following the September 11, 2001 attacks, stock market 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.
This downturn can be viewed as part of a larger bear market or correction, after a decade-long bull market had led to unusually high stock valuations. In fact, some Internet companies (Webvan, Exodus Communications, and Pets.com) went bankrupt. Others (Amazon.com, eBay, and Yahoo!) went down dramatically in value, but remain in business to this day and have generally good long term growth prospects. An outbreak of accounting scandals (Enron, Arthur Andersen, Adelphia, and WorldCom) was also factor to the speed of the fall, as numerous large corporations were forced to restate earnings (or lack thereof) and investor confidence suffered. The September 11 attacks also contributed heavily to the stock market downturn, as investors became unsure about the prospect of terrorism affecting the United States economy.
The International Monetary Fund had expressed concern about instability in United States stock markets in the months leading up to the sharp downturn.
The technology-heavy NASDAQ stock market peaked on March 10, 2000, hitting an intra-day high of 5,132.52 and closing at 5,048.62. more...