They've seen this happen before. But it's still scary.
Stock and bond traders had the weekend to ponder the Friday plunge that pushed the Dow Jones industrial average down 171.24 points, the third-biggest point drop ever. Bonds endured a more punishing rout, suffering their worst day in 20 years.Meanwhile Monday on Wall Street, the Dow Jones industrial average was up 38.65 at 5,509.10 at noon after a shaky start. Declining issues still had a slight lead on advancers on the New York Stock Exchange, with 1,154 issues down, 1,084 up and 765 unchanged. Broad-market indexes were mostly higher. The NYSE composite was up 0.47 at 340.21, the Standard & Poor's 500 composite was up 1.55 at 635.05, the American Stock Exchange's market value index was down 0.83 at 557.33, and the Nasdaq composite was up 10.89 at 1,074.62.
The stock market's retreat Friday was not surprising - the Dow average alone surged more than 30 percent last year and was up 10 percent this year before the violent sell-off. Predictions of a pullback have been rampant.
Nonetheless, the Dow's behavior almost immediately brought comparisons to the crash of 1987, when a 108-point decline on Friday, Oct. 16, preceded the 508 point melt-down on Oct. 19 - Black Monday.
Wall Street analysts said over the weekend they didn't believe another drop like 1987 was looming - but they really weren't certain what the week would bring.
"The only thing for sure is there's going to be some volatility," said Sung Won Sohn, chief economist at Norwest Corp., a banking company.
Stock prices finished broadly lower Monday in Japan and were lower at midday in Europe, but trading volume was light to moderate.
One thing market analysts worked to decipher over the weekend was the nature of Friday's drop. Was it simply a blip or the beginning of a "correction," a loosely defined term meaning a retreat in prices that allows an overall advance to continue?
"I think that's what we have going on here, a correction within the theme of an ongoing up trend," said Eugene Peroni, director of technical research at Janney Montgomery Scott, a brokerage firm.
Wall Street generally defines a correction as a decline in stock prices of 10 percent or so. The Dow's drop Friday to 5,470.45 represented just a 3 percent erosion. So analysts such as Peroni figure there's more to come, though not all in one day.
The Dow's most recent record high came last week at 5,642.42, which means a 10 percent correction would bring the average back to a bit over 5,000 - a level the market cracked only four months ago.
For comparison's sake, the Oct. 19, 1987, crash took the Dow industrials down about 23 percent.
Despite Friday's sell-off, the Dow Jones industrials are still up about 7 percent so far this year.