Big Sissy's Moving Story

Tonight Big Sissy was feeling very chatty, and she started telling me a story that she made up. It started out very silly and she was giggling about her baby doll named Baby Molly who was pooping all over everything, etc. She went on and on, though, and after a while there was a shark who came along in the big ocean and ate her mommy and daddy and Little Sissy. The doctor had to get her a new family. Then she fell into the ocean and started to sink. She called for Mommy, but it was her new Mommy, etc. The next thing I know she actually had tears in her eyes. She was making her own story so sad it was making her cry!!! She's had some nightmares lately, and I can see how her vivid imagination can just completely get out of control. I wasn't sure what to do. I didn't want to thwart her imagination, but I didn't want her to be getting so emotional over a made up story, either. I tried to help her think of a happy ending, then I quickly said, "The End." Yikes! Any ideas for how to handle this kind of imagination?