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 gauge' jumps after U.S. outlook downgrade

VIXClick the chart for more data on the VIX. By Ken Sweet, contributing writer


NEW YORK (CNNMoney) -- Wall Street's fear gauge soared more than 10% Monday, after Standard & Poor's slashed its outlook on U.S. debt to negative.

The VIX (VIX) rose 11% to a reading of 16.99 -- its highest level in three weeks. Earlier it was up nearly 23%.

However, the index is still well below the elevated levels it hit in mid-March, when the nuclear catastrophe in Japan became front page news.

A reading of 30 is typically considered a fear tipping point. The VIX index hit an all-time high of 90 during the height of the financial crisis.

On Monday, the S&P lowered its credit outlook for the United States' "AAA" rating to "negative" from "stable," citing uncertain political debate around the nation's fiscal problems.

"The outlook reflects our view of the increased risk that the political negotiations, over when and how to address both the medium- and long-term fiscal challenges, will persist until at least after national elections in 2012," said S&P credit analyst Nikola Swann.

The news sent the Dow falling 140 points, bond yields rising, and gold spiking to near $1,500 an ounce. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.97%3.98%
15 yr fixed3.15%3.16%
5/1 ARM3.29%3.35%
30 yr refi3.99%4.00%
15 yr refi3.17%3.18%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 19,549.62 297.84 1.55%
Nasdaq 5,393.76 60.76 1.14%
S&P 500 2,241.35 29.12 1.32%
Treasuries 2.35 -0.05 -2.05%
Data as of 7:37am ET
Company Price Change % Change
Bank of America Corp... 22.57 0.41 1.85%
Chesapeake Energy Co... 7.58 0.00 0.00%
Ford Motor Co 13.06 0.50 3.98%
Wells Fargo & Co 57.28 1.73 3.11%
Micron Technology In... 20.44 1.38 7.24%
Data as of Dec 7

Sections

Michael Jordan just won a legal battle with a Chinese sportswear company over the use of his name. More

A Bumble Bee senior executive will plead guilty to his role in a conspiracy among major seafood firms to fix the price of canned tuna. More

Now that smart home products are more affordable and ubiquitous, 2016 is ready to deliver a next-level celebration. More

For Americans under age 40, about half of them say they can't come up with $2,000 if an emergency came up, according to the New York Federal Reserve. More