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Buzzword: Correction

Marketplace Staff Jun 16, 2006

A polite for term for rude awakening brings us this week’s Marketplace Money Buzzword: Correction. A correction is when a well-mannered market quickly loses 10 to 20 percent of its value. This week, markets around the world dropped on fears of inflation in the US. That drop pushed the NASDAQ into correction territory. By last Tuesday it was down more than 11 percent from a month ago, which to investors felt rather incorrect. Just a few days later, of course, the ‘Daq had courteously climbed 3 percent. But if it dives deep again and stays down, that would be called a bear market. And there’s just nothing polite about bears.

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