Fear index soars to 14-month high

By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- Wall Street's key measure of volatility skyrocketed on Thursday, as all major stock indexes plummeted on concerns about the European debt crisis.

The CBOE Volatility (VIX) index, or the VIX, jumped 31.2% to 46.35, after surging as high as 46.37 earlier in the session.

chart_ws_stock_cboemktvolatilityidx.03.png

Stocks fell sharply, with the Dow Jones industrial average (INDU) plunging more than 200 points, or 2.7%, after sinking as much as 328 points earlier in the session.

Year to date, the VIX has risen 114%. It's up more than 73% over the past five days alone. Just four weeks ago, the VIX was at a three-year low.

A VIX reading higher than 30 is considered a sign that investors are getting worried. But even at Thursday's highs, the VIX is still way below the peak level of almost 90 hit in October 2008 -- after Lehman Brothers collapsed.

Concerns about European debt have battered global stocks and spilled over into U.S. markets. The European Union and International Monetary Fund hammered out a $1 trillion European aid package, but that has failed to assuage worries.

Some investors fear that even the massive bailout won't be enough to contain debt problems from spreading throughout Europe. Earlier this month, riots in Greece turned deadly with protesters enraged over severe new government austerity measures.

Other countries, including Portugal and Spain, also announced budget cuts to avoid problems seen in debt-choked Greece -- but investors worry that could hamper fragile recovery. Those fears sent the euro spiraling to a four-year low, which set off alarm bells for market participants.

European shares also felt the blow Thursday, closing lower to extend the previous session's sharp drop. Britain's FTSE 100 was down 2%, France's CAC 40 fell 4.2% and Germany's DAX lost 2%. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.04%4.13%
15 yr fixed3.04%3.09%
5/1 ARM3.22%3.22%
30 yr refi4.08%4.18%
15 yr refi3.11%3.16%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,356.87 288.00 1.69%
Nasdaq 4,644.31 96.48 2.12%
S&P 500 2,012.89 40.15 2.04%
Treasuries 2.15 0.08 3.72%
Data as of 5:11pm ET
Company Price Change % Change
Bank of America Corp... 17.26 0.54 3.23%
General Electric Co 24.66 0.17 0.69%
Apple Inc 109.41 2.66 2.50%
Cisco Systems Inc 26.81 0.22 0.85%
Microsoft Corp 45.74 0.58 1.28%
Data as of 4:04pm ET

Sections

The Internet could be both villain and savior to Sony by giving it an option on how to release its controversial comedy. More

Fed chief Janet Yellen believes the steep drop in oil prices is a net positive for the U.S. economy More

Reddit made the unusual decision to take down a subreddit that housed hacked Sony Pictures materials. More

News startup The Skimm announced a new round of funding, 1 million active readers, and plans to expand into a 'lifestyle brand.' More

Congress waited until the last minute to decide what to do with a slew of expired tax breaks. They extended most of them, and a handful will affect individuals directly. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.