Implied Volatility

Stocks Extend Slide as Nasdaq Enters Correction Territory

The Dow Jones, S&P 500 and Nasdaq Composite Index declined sharply on Wednesday.

The Dow and broader U.S. stock market continued lower on Wednesday, as the tech-heavy Nasdaq Composite officially entered correction territory.

Wall Street’s major indices were lower at the close, with the Dow Jones Industrial Average (DIA) falling 339.82 points, or 1%, to 35,028.65.

The broad S&P 500 Index (SPY) of large-cap stocks declined 1% to settle at 4,532.76. Most sectors finished in negative territory.

Meanwhile, the technology-focused Nasdaq Composite Index (QQQ) plunged 1.2% to close at 14,340.25.

A measure of implied volatility known as the CBOE VIX (VXX) rose on Wednesday. The so-called “investor fear index” reached an intraday high of 23.99 on a scale of 1-100, where 20 represents the historical average. It would eventually settle up 4.7% at 23.85.

In commodities, oil prices rose on Wednesday, as U.S. West Texas Intermediate advanced $1.15, or 1.4%, to $86.58 a barrel on the New York Mercantile Exchange. Brent, the international futures contract, climbed 58 cents, or 0.7%, to $88.09 a barrel.

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In precious metals, gold prices rose sharply, as the February futures contract climbed $28.90, or 1.6%, to $1,841.30 a troy ounce on the Comex division of the New York Mercantile Exchange. Silver futures rose 73 cents, or 3.1%, to trade at $24.22 a troy ounce.

The Final Word: In economic data, housing starts rose 1.4% in December to a seasonally adjusted annual rate of 1.702 million. Building permits rose by 9.1% to a seasonally adjusted 1.873 million units.