Sensationalism is, as Webster notes below, the type of writing (these days, usually news reporting) that tries to invoke emotions.
Many people think sensationalism means "reporting about bad things". This isn't true. There is a way of telling about bad news without it becoming sensationalism.
The key here is stress. Normal newspapers (at least here) tend to tell about bad things in coldly objective voice, "Train collided with car on crossing, 2 dead". Whole article in the corner of the page. End of discussion.
In evening tabloids, the tone may be different - two-page article, color photographs from the accident site, comments from the tearful family members, and so on. This might be sensationalism. Sensationalistic journalism seeks to find emotions - they make accidents, no matter how insignificant in grander scale, look thought-provoking - usually trying to remind people that life's a bitch and disasters happen. Meanwhile, publishers get more and more rich.
EXPLOSION IN THE MALL
At least one got scared
Fortunately it was just a balloon
(From Mauri Kunnas' book, whose name escapes my mind right now...)