- CAI jumps on Mitsubishi $ 1 billion acquisition deal
- Bank shares extend decline
- The CBOE volatility index is advancing by 20 points
- Indices below: Dow 1.14%, S&P 0.94%, Nasdaq 0.79%
June 18 (Reuters) – The Dow fell 1% on Friday after Federal Reserve official James Bullard said inflation was stronger than expected and that the central bank would take several meetings to figure out how to reverse the stimulus.
The blue-chip dove and S&P 500 were set to be the worst day in a month after St. Louis Federal Reserve Chairman Bullard said he was one of seven officials to see a rate hike starting next year to control inflation.
CBOE Fluctuation Code (.VIX), Wall Street’s fear level rose to 20.60 points, the highest level since May 21 following his comments.
“This could indicate that inflation is becoming a concern for the central bank,” said Rick McLaren, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
“Second, it suggests that the tightening will disrupt the growth of the economy and the returns of the S&P 500 more than investors thought.”
After Wall Street’s key signals unexpectedly signaled earlier this week, its massive stimulus could start faster than expected, setting the S&P 500 benchmark (.SPX) Definitely a three week win. read more
Rate Sensitive Bank Shares (.SPXBK) Shed 1.8% as US yield curve flatts. [US/]
“The surprising fall in long-term yields this week shows the market is concerned about the strength of the recovery in the second half of this year,” said Ryan Tetrick, senior market strategist at LPL Financial.
11:47 a.m. ET, Dow Jones Industrial Average (.DJI) 386.62 points or 1.14% lower at 33,436.83, the S&P 500 (.SPX) 39.84 points or 0.94% to 4,182.02. Nasdaq hybrid (.IXIC) 111.22 points or 0.79% lower at 14,050.13.
Friday is “Fourfold Witch Day”, the quarterly expiration of US options and futures contracts, bringing with it increased trading volume in the market close.
Randy Frederick, vice president of trade and descendants of Charles Swabin, noted that this was the expiration of the largest options in history.
At 2.88-to-1 on the NYSE and 2.63-to-1 on the NASD, the issues are lower than advisers.
The S&P Index 12 recorded a new 52-week high and a new low, while the Nasdaq recorded 32 new highs and 38 new lows.
Sagarika Jaisihani Report in Bangalore; Editing by Maju Samuel
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