Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Fear index eases off 14-month high

By Chavon Sutton, staff reporter


NEW YORK (CNNMoney.com) -- Wall Street's key volatility measure fell Tuesday as stocks, battered by persistent worries about the health of European banks and sustainability of the global economic recovery, pared losses.

The CBOE Volatility (VIX) index, or the VIX, fell 7.5% to 35.61, after rising as high as 43.74 earlier in the trading session. The index has eased off the 14-month high set last Thursday.

chart_ws_stock_cboemktvolatilityidx.03.png

Investors remained skittish as stocks plunged around the globe earlier Tuesday. The Dow Jones industrial average lost (INDU) nearly 200 points, continuing the downward tear it has been on for most of May, before cutting some losses in afternoon trading.

The VIX jumped 30% on May 20 to settle at 45.79, the highest level since March 20, 2009, following Germany's ban on so-called naked short selling on some financial institutions and European Union government bonds. A VIX reading higher than 30 is considered a sign of increased worry among investors.

The move was geared toward stabilizing the euro and the region, but instead sent stocks plunging, as many investors saw it as a sign that European banks and sovereigns are on shaky footing.

Although down on Tuesday, the VIX is still up 129% since April 12, when it was trading at 15.58 -- its lowest level in nearly three years.

Year-to-date the fear gauge is up 63.75%, and up 20.4% over the past five days. Global stocks have struggled for weeks amid a spate of unsettling news from the euro zone that has sent investors fleeing risky assets such as stocks, commodities, and the euro.  To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.34%3.50%
15 yr fixed2.62%2.65%
5/1 ARM2.88%2.93%
30 yr refi3.39%3.39%
15 yr refi2.64%2.67%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 18,308.15 164.70 0.91%
Nasdaq 5,312.00 42.85 0.81%
S&P 500 2,168.27 17.14 0.80%
Treasuries 1.61 0.05 3.28%
Data as of 2:14pm ET
Company Price Change % Change
Procter & Gamble Co 89.75 1.52 1.72%
Bank of America Corp... 15.65 0.49 3.23%
Chesapeake Energy Co... 6.27 0.15 2.45%
Wells Fargo & Co 44.28 -0.09 -0.20%
Cognizant Technology... 47.71 -7.29 -13.25%
Data as of Sep 30

Sections

On September 8, Americans learned that Wells Fargo had fired 5,300 employees for secretly creating as many as 2 million unauthorized accounts. It's been a hellish month for the bank. Lawmakers have called Wells Fargo a "criminal enterprise" guilty of a range of crimes, including conspiracy to commit fraud and have called on the CEO to resign. More

China is no longer offering Venezuela new loans, according to experts. It spells bad news for Venezuela, which relied heavily on Chinese finance. More

These startups are helping landlords and cities sniff out illegal short-term rentals. More

U.S. Labor Secretary Tom Perez writes about why the Labor Department introduced a new rule requiring federal contractors to provide paid sick leave to workers. More