In the VIX, which is currently at 26.79, or up nearly 5%, moved north of 28 for the first time since Dec 2011
Stocks are sinking today (Wednesday, October 15, 2014) as fears of a global slowdown are further set in. Dangerously low inflation in Europe and ripples from a steep drop in oil prices are both impacting the downturn. ?Feeding the gloom this morning was a weaker-than-expected report on U.S. consumer spending. Traders said swings across financial markets appeared to be magnified by investors?particularly hedge funds?scrambling to exit money-losing investments.
Each of the major indexes fell more than 2 percent shortly after the open, sending the S&P 500 and Nasdaq into negative territory for the year, before paring losses. The Dow industrials fell into the red for 2014 on Friday.
As of this writing, the DJIA is down 364 (2.24%), S&P 500down 43 (2.31%), and Nasdaq down 81 (1.91%).
In the VIX, which is currently at 26.79, or up nearly 5%, moved north of 28 for the first time since Dec 2011. The index has seen over 625K options contracts already traded on the day. Nearly three-quarters (465K) is on the call side of the options chain, being led by Oct 27, Nov 22, and Nov 30 calls. The largest trade is an Oct 17 – Nov 22 call spread for $3.05, 22500X – maybe a closing trade or a roll out to Nov from Oct.
In earnings news, Bank of America shares were off 3 percent to $16.03 after posting its third-quarter results. The S&P financial sector fell 2.1 percent as the worst performing of the ten major S&P sectors, all of which were in negative territory.
S&P 500 companies are expected to show earnings growth of 6.7 percent in the third quarter, according to Thomson Reuters data, with revenue growth expected at 4 percent.
The beige book number were also released today, which shows a moderate to modestly growing economy with little sign of inflation.
The brightest note: Commercial construction, which grew in most districts. In some areas, such as Chicago and Dallas, projects were delayed because of a shortage of skilled construction workers. And the New York Fed noted an increase in demand for commercial construction loans.
Another bright spot was transportation. The Fed said that demand for trucking, rail and other transportation was generally growing, and that insufficient capacity was a problem in some districts, such as Minneapolis, Cleveland and Kansas City.