WhyItDropped

Nasdaq · March 1, 2002

The day the doubt spread to others

+4.11%

single-day change vs previous close

Part of a longer stretch

Nine months when the books could not be trusted

early in it · 2002-01-04 → 2002-10-09, -45.90% over the whole period

What happened that day?

  • The Nasdaq rose 4.11% on the day
  • The manufacturing survey returned to expansion for the first time in months, a signal that the economy really was recovering
  • The market in this period moved between two stories — the economy is improving, and company books cannot be trusted
  • After the large energy company went bankrupt in January, suspicion spread that other firms had inflated profits the same way
  • So even good economic data did not produce lasting gains
  • This rise carried only to mid-March before slipping back

Sources

Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.