Wall Street extended losses as volatiliy soared
Major equity indexes in the U.S. recorded heavy losses on Thursday as the CBOE's Volatility Index , VIX, or Wall Street's "fear gauge", leaped to its highest level in six weeks.
After tech giants like Microsoft and Apple shares fell sharply, the technology index .SPLRCT closed the day nearly 2% lower and weighed on the S&P 500 Index. One of the two sectors that were able to close the day higher was the .SPNY (energy) as the recovery seen in crude oil prices continued to support the oil companies' shares.
Financial sector .SPSY gained 0.65% on Thursday as the U.S. Federal Reserve announced yesterday, after the closing bell, that all the banks (34) passed the stress test and that it approved the banks' plans to raise dividend payouts and share buybacks.
"U.S. equities have remained extended, at or close to record territory for an extended period of time really without a tremendous amount of conviction in the market," Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York, told Reuters.
The Dow Jones Industrial Average recorded its biggest daily drop in more than six weeks as it lost 167.58 points, or 0.78%, to close at 21,286.91. The S&P 500 dropped 19.50 points, or 0.8%, to 2,419.00 and the Nasdaq Composite fell 109.49 points, or 1.76%, to 6,124.92.
Headlines from the U.S. session:
- US Dollar Index continues to slide: lowest close since September
- Fed's Bullard: September seems more likely to announce balance sheet adjustment
- US Treasury's Mnuchin: No decision has yet been made with regard to next Fed chair
- Fed's Bullard: Inflation breakevens suggest Fed is being too hawkish
- US House Speaker Ryan: I believe Senate will pass healthcare
- Canada's trade minister is trying to save NAFTA - Reuters