The sell-off in stocks has fallen to a new level in market lingo: a correction. After tumbling in the past week, the S&P 500-stock index closed on Thursday in that territory.

What is a stock market correction?

A correction is a 10 percent drop in stocks from their most recent peak. Since Feb. 19, the S&P 500 has fallen 12 percent.

In some ways, 10 percent is an arbitrary threshold. But it often signals that investors have turned more pessimistic about the markets.