Volatility Returns to Financial Markets Amidst Economic Concerns

Wall Street has had one of its most volatile weeks with the indexes rising and dropping sharply. Wednesday had U.S. stocks score their biggest one-day gains of the year with the Dow climbing 1.6% to 16,994.22 and the S&P 500 .SPX jumping 33.79 points to 1,968.89. However, the markets reversed completely on Thursday with the Dow registering its worst one day drop in more than a year, sliding 334.97 points, or 2%, to 16,659.25. The S&P 500 SPX also recorded its biggest one-day percentage drop since April 10, ending Thursday 40.68 points lower at 1,928.21. The Nasdaq also shed 2.2 percent to 4,378.34. Thursday’s losses came after a 275-point rally on Wednesday and a 273-point plunge Tuesday. The CBOE Volatility Index rose sharply from 18.76 to 24 percent, a clear indicator of the current fear in the market. The S&P was dragged down by the energy sector as crude prices slipped to $88.11 a barrel.

Global Economic Slowdown a Major Concern

Weak economic data from Germany, hints of a slowdown in the euro zone’ economy by European Central Bank’s President Draghi, and dovish Fed comments all kept the bulls away on Thursday as the S&P fell below its 150-day moving average for the first time in 22 months. However, there were no signs of panic selling or a major move to safe haven bonds. Shares of smaller U.S. companies were under pressure as the Russell 2000 Index dipped 2.7 percent. Shares of Auxilium (NASDAQ: AUXL) touched a 52-week high of $33 before closing 9.01 percent higher at $32.44 following news of the company’s acquisition by Endo International (NASDAQ: ENDP) for $2.6 billion. Also bucking the trend were companies linked to Ebola. Shares of Lakeland Industries (NASDAQ: LAKE) were up 52.50 percent to $17.72 while AlphaPro Tech (NYSE: APT) also hit a 52-week high before ending the day almost 28 percent higher at $4.84.
Asian Markets Slide; Euro Trades Flat

Asian markets took cues from Wall Street, beginning Friday in the red. Japan’s Nikkei.N225 ended down 1.2 percent lower as the yen gained ground on safe haven bids. Hong Kong’s Hang Seng Index .HSI was down 1.8 percent while prospects of a weak opening dawned on UK’s FTSE 100, Germany’s DAX and France’s CAC. The U.S. dollar steadied against the euro and yen. The euro was last trading flat at $1.2695 The dollar remained little changed against the yen and was last at 107.88 yen after dropping to a three-week low of 107.53 on Thursday. The recent decline in U.S. Treasury yields stemmed the strength of the dollar which had touched a six-week high of 110.09 yen on Oct. 1.
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