Business Communication and Character

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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.