Week of September 29, 2008

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Stocks plunged as Wall Street faced its worst crisis in years.

The week of September 15th was a very bad week on Wall Street. In fact, it was one of the worst weeks in years. Wall Street is the street in New York City where many financial companies are located, as well as the New York Stock Exchange, a site where huge numbers of stocks are bought and sold each day. Stocks are shares in a company that people can buy, and the profits of the company are divided among the stockholders. If a company's stock price is high, that usually means the company is doing well, and stockholders are happy. If a company's stock price is low, stockholders are unhappy because their stocks aren't worth much.

The chart here shows what happened to stock prices as of September 17th. The Dow Jones Industrial Average is used to keep track of the average stock prices of 30 of the largest companies in the country. It includes companies like Coca-Cola, McDonald's, and Wal-Mart. People look at Dow Jones as one sign of how our economy is doing. The Dow Jones Industrial Average dropped more than 500 points that day. It was the largest drop in seven years.

The reason stock prices fell is that several big companies were either sold or filed bankruptcy because they were losing money. This had a kind of ripple effect on the stock market, because it affected not only the people who work for those companies, but also all the people who did business with those companies. Do you know if stock prices have gone back up since September 17th? Let's look at why so many big companies have been losing money.

   


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