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The U.S. stock market has been taking a beating over the past week.
Yesterday, the Dow Jones Industrial Average closed 1,191 points lower than it opened. The Dow is an index of significant stocks like Apple, Coke and Home Depot, and Thursday's point drop was its worst single day fall in history.
Another index named the S&P 500 also dropped. So did the Nasdaq Composite, each of them falling by more than 4 percent.
All three of these stock indexes are now on track for their worst weekly percentage drops since October of 2008. But at that time, the great recession was going on. It was an economic downturn that affected markets around the world.
This time around, markets are struggling with the fallout from the spread of the new coronavirus. Investors are worried about the effects this disease could have on the global economy. Right now, American stocks are said to be in correction territory. Here's what that means.
CHRISTINE ROMANS, cnn CHIEF BUSINESS CORRESPONDENT: Fixing an error or inaccuracy — that's how the dictionary defines a correction.
On Wall Street, it means something a little different. A stock market correction is a technical term that signifies a 10 percent decline from a recent high.
It's less severe than a bear market. That's when stocks decline 20 percent.
Now, a correction might sound scary but in fact, it's a normal, healthy part of the cycle. The S&P 500 had four corrections from 2010 through 2017, and five from 1990 to 2000. That's because markets aren't supposed to go straight up. A breather once in a while is important, like a market reset.
It can keep stocks from overheating and allow investors to reevaluate their portfolios.
What you definitely shouldn't do is panic. A correction doesn't mean you should sell all of your stocks. On the contrary, it can be an opportunity to buy. Remember, history stocks often go up after a correction.
