Market Update: DJIA Plunges More than 400 Points as Panic Rises; VIX Up Nearly 3...

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Market Update: DJIA Plunges More than 400 Points as Panic Rises; VIX Up Nearly 30%
Heavy selling has smacked the Dow south of 11,000
8/18/2011 11:49:50 AM permanent link Keywords:

DJIA SPX VIX COMP

U.S. stocks have taken a stomach-churning dive today, as economic anxiety has rocked global equities markets. Morgan Stanley set the bearish tone this morning by slashing its global growth forecast for 2012, and warning that both the U.S. and Europe are "hovering dangerously close to recession." The day's onslaught of economic data only served to support the firm's gloomy outlook: Initial jobless claims surged back above the 400,000 level; existing home sales fell to a fresh eight-month low; and the Philly Fed index plummeted to negative 30.7, its lowest reading since March 2009. Another round of downbeat earnings is only exacerbating the sell-off, with lackluster revenue forecasts from NetApp (NTAP) and JDS Uniphase (JDSU) weighing heavily on tech stocks. At midday, only safe havens are bucking the downtrend. Ten-year Treasury yields fell to a record low of 1.99% earlier, while gold futures have rallied to a fresh all-time peak of $1,829.70 per ounce. The Dow Jones Industrial Average (DJIA - 10,994.59) has spiraled to a loss of 415.6 points, or 3.6%, and now appears to be finding resistance at the freshly breached 11,000 level. The S&P 500 Index (SPX - 1,146.79) is down 47.1 points, or nearly 4%, and the Nasdaq Composite (COMP - 2,403.48) has plummeted 108 points, or 4.3%. Checking in on Dow components, all 30 blue chips are in the red at last check. Given the parade of disappointing tech earnings this week, it's no surprise to find Hewlett-Packard (HPQ - 29.49) down more than 6% ahead of its own turn in the earnings confessional. As stocks suffer, the CBOE Market Volatility Index (VIX 40.90) has rocketed back above the round-number 40 neighborhood, with the "fear index" up 29.5% at midday. The VIX peaked at 42.63 earlier in the session. Among equities in focus, Sears Holdings (SHLD - 56.40) has tumbled more than 6% after unveiling a wider-thanforecast quarterly loss. Earlier, the retailer tagged a new annual low of $56.02. On the other hand, Hot Topic (HOTT - 7.56) is among the elite advancing equities today, shrugging off early weakness to jump 8.8% after earnings. NetApp's lackluster forecast inspired several bearish brokerage notes for sector peer EMC Corp. (EMC - 20.24), which is sitting on a loss of about 10% at last check. Elsewhere in the tech sector, Salesforce.com (CRM - 118.01) has given up 6.6% ahead of tonight's earnings report. -posted by Elizabeth Harrow (eharrow@sir-inc.com) 8/18/2011 11:49:50 AM

http://www.schaeffersresearch.com/commentary/content/market+update+djia+plunge... 18/08/2011

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