Coming to terms | Dow slips into "bear-market territory"

Commentators noted this week that the Dow Jones industrial average had slipped into "official bear-market territory." What constitutes a bear market?

Any market condition where pessimism runs rampant, investors ignore positive news to focus on the negatives, and where stocks are falling and expected to fall further can be termed a bear. (The term, by the way, is believed to come from "bearskin jobbers" — 17th- and 18th-century traders in London who would sell bearskins before the bears had been caught, hoping they could buy the skins more cheaply by the time they had to deliver them. Hence, a "bear" became someone betting that prices will go lower.)

A big one-day price drop, or even a series of them, isn't enough to qualify as a bear market.

While there's no universally accepted definition, a commonly cited one is a decline of at least 20 percent in one or more broad-market indexes over a period of two or more months.

The Dow's most recent high was on Oct. 9: 14,164.53. It closed at 11,215.5 on Wednesday — 20.8 percent lower. The S&P 500 is down 19.4 percent over the same period.

Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com