Whats the difference between a legitimate drop in the market (1987) and not (Thursday)?
On Thursday afternoon the S&P 500 dropped almost 9% before recovering. For 15 minutes things felt like pure panic. But it was a lot different than one of the largest panics in market history, Black Monday of 1987, when the S&P 500 fell 20.4% in a day. Think about it in terms of scale: a day vs. minutes, or broad drops versus a number of haywire stocks: In the week before Black Monday, the S&P 500 was already down 9%. This time around, the S&P was only down 3% in the five days before Thursday. So bearishness was more prevalent in 1987. Black Monday also opened with a slew of sell orders. Many floor specialists couldn’t even trade for the first hour because almost no one was buying. It was a broad and day-long selloff. Compare that with Thursday, when the S&P slowly fell 3% during the day before plunging and recovering more than 5% between 2:45 and 3:00 p.m. Manic selling occurred in a much shorter timeframe on Thursday. Philip Morris International dipped more than 15% in just 15 minutes
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