Editing Stock market downturn of 2002 (section)

==Background==
This downturn can be viewed as part of a larger [[bear market]] or correction that began in 2000 after a decade-long [[bull market]] had led to unusually high stock valuations, according to a report by the Cleveland Federal Reserve.<ref>{{cite web |url=http://www.clevelandfed.org/research/commentary/2001/0115.pdf |title=A Retrospective on the Stock Market in 2000 |access-date=2012-03-28 |url-status=dead |archive-url=https://web.archive.org/web/20120404181644/http://www.clevelandfed.org/research/commentary/2001/0115.pdf |archive-date=2012-04-04 }}</ref> The collapse of [[Enron]] is a prime example. Many internet companies ([[Webvan]], [[Exodus Communications]], and [[Pets.com]]) went [[bankrupt]].  Others ([[Amazon.com]], [[eBay]], and [[Yahoo!]]) went down dramatically in value, but remain in business to this day and have generally good long-term growth prospects. An outbreak of [[accounting scandals]], ([[Arthur Andersen]], [[Adelphia Communications Corporation|Adelphia]], [[Enron]], and [[WorldCom]]) was also a factor in the speed of the fall, as numerous large corporations were forced to restate earnings (or lack thereof) and investor confidence suffered.  The [[September 11 attacks]] also contributed heavily to the stock market downturn, as investors became unsure about the prospect of [[terrorism]] affecting the [[Economy of the United States|United States economy]].

The [[International Monetary Fund]] had expressed concern about [[economic stability|instability]] in United States stock markets in the months leading up to the sharp downturn. The technology-heavy [[NASDAQ]] stock market peaked on March 10, 2000, hitting an intra-day high of 5,132.52 and closing at 5,048.62.  The [[Dow Jones Industrial Average]], a price-weighted  average (adjusted for splits and dividends) of 30 large companies on the [[New York Stock Exchange]], peaked on January 14, 2000, with an intra-day high of 11,750.28 and a closing price of 11,722.98.  In 2001, the DJIA was largely unchanged overall but had reached a secondary peak of 11,337.92 (11,350.05 intra-day) on May 21.

The downturn may be viewed as a reversion to average stock market performance in a longer-term context. From 1987 to 1995, the Dow rose each year by about 10%, but from 1995 to 2000, the Dow rose 15% a year. While the [[bear market]] began in 2000, by July and August 2002, the index had only dropped to the same level it would have achieved if the 10% annual growth rate followed during 1987–1995 had continued up to 2002.