Misleading Headlines About the Market Dip
/The stock market took a dive this week, but headlines are making it sound worse than it is. Here are three examples:
- FoxNews: "Investors hope for reversal after biggest stock market dip of all time"
- The Guardian: "Australian and Asian stock markets slide after Dow suffers biggest one-day points fall – as it happened"
- CNBC: "Dow's nearly 1,600-point plunge marks its biggest one-day point drop ever"
The headlines are technically correct that a nearly 1,600 point decline is the largest in U.S. history, but looking at only the point value is misleading. A percentage drop would be a better indication of the effect. This table represents the largest daily stock market losses. The display below is sorted by point loss; the table at right is sorted by percentage. You can see that 2018-02-05 falls in rank when we look at the percentage.
Also, the stock market has had incredible gains this past year, so the 26,000+ value could be viewed as an anomaly, and most analysts didn't believe those gains were sustainable.
Discussion:
- What are the ethical considerations for news agencies publishing these headlines?
- What might be a more appropriate headline for the news?
Perhaps this one-year chart helps keep the loss in perspective. It includes today's rebound of 567 points.
