WhyItDropped

Nasdaq · April 17, 2000

The bounce after the worst week

+6.56%

single-day change vs previous close

Part of a longer stretch

The eleven weeks when the bubble first broke

midway through · 2000-03-10 → 2000-05-23, -37.32% over the whole period

What happened that day?

  • The Nasdaq rose 6.56% on the day
  • It followed a week in which the index had lost close to a quarter. Falls of that size always produce a day that takes some back
  • Most of the leveraged positions had been cleared out the week before. With fewer forced sellers, the pressure eases
  • The next day rose sharply too, recovering much of the previous week's fall in two sessions
  • A snap-back like this is not a signal of a bottom. The steeper the decline, the more big up days appear inside it
  • The index in fact fell for another two and a half years, bottoming in October 2002

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.