A measure of volatility on Wall Street on Tuesday rose to its highest level in more than 5 months as U.S. equity benchmarks looked set to extend a slide as the yield in a 10-year Treasury notes hovered around its highest level in more than three years. The CBOE Volatility Index was up at 14.16, up 2.1%, marking its highest level since Aug. 18, 2017, according to FactSet data. The VIX uses bullish and bearish option bets on the S&P 500 index to reflect expected volatility over the coming 30 days, and it typically rises as stocks fall. However, the gauge, sometimes referred to as the fear index, has been abnormally low, trading below its historical average at around 20. To be sure, it is still holding at a level below that historic mean but its recent pick up suggests that investors are betting that volatility will accelerate in the future. A rise in 10-year Treasury note yield above 2.72% on Monday also has drawn attention, because rising rates can undercut appetite for stocks if government paper offer richer yields than risk assets like stocks. Futures for the Dow Jones Industrial Average were off triple digits, while those for the Nasdaq-100 index and the S&P 500 index were all down firmly Tuesday morning. All three benchmarks finished firmly lower on Monday. Neither the Dow nor the S&P 500 have recorded back-to-back losses in January.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News