Market Wrap for Wednesday, April 17: Stocks Plunge Again Along With Euro
The U.S. stock market fell sharply on Wednesday as volatility continues to pick up on Wall Street.
Concerns over global growth have caused the recent market gyrations that have sent the CBOE Volatility Index soaring. A large decline in the euro and a surging U.S. dollar also helped to cap risk appetite on the day.
The major averages also plunged on Monday, but made up a substantial portion of those losses on Tuesday prior to today's sell-off.
The Dow Jones Industrial Average fell 138 points, or 0.94 percent, to 14,617.
The S&P 500 lost almost 23 points, or 1.43 percent, to 1,552.
The Nasdaq Composite lost 60 points, or 1.84 percent, to 3,205.
Crude oil futures traded lower on Monday amid risk aversion on Wall Street. Near the close of equities, NYMEX crude futures, the U.S. benchmark, had lost a little more than 2 percent and were trading at $86.82. Brent crude contracts were also down slightly more than 2 percent to $97.75. Natural gas added around 1 percent on Wednesday to $4.20.
Precious metals continued to move lower on Wednesday. At last check, COMEX gold futures were down around 0.88 percent to $1,373.20. Silver futures had lost almost 2 percent to $23.17 nearing the closing bell. Copper futures lost around 4 percent on the session and are sitting near new 52-week low levels amid a broad-based sell-off in commodities.
Most grains were higher on the day despite general investor risk aversion in other markets. Corn futures were slightly positive heading into the close of equity trading while wheat futures had lost less than 0.10 percent. There was very little volatility in soft commodities on Wednesday, with the biggest mover being cotton, which added around 1.44 percent.
Treasury prices moved higher on the session as investors moved cash into bonds. At last check, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) had climbed 0.57 percent to $122.67. Higher prices led to lower yields on Wednesday.
Yields on the 2-Year Note and the 5-Year Note were both unchanged at 0.23 percent and 0.70 percent, respectively. The yield on the 10-Year Note fell two basis points to 1.70 percent. The 30-Year Bond yield also lost two basis points to 2.88 percent.
As stocks fell on Wednesday, the U.S. dollar moved sharply higher. Near the close, the PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was up 1.12 percent to $22.48.
The closely watched EUR/USD pair was last trading down 1.35 percent to $1.3013. Other significant currency movers on the day included the GBP/USD, which fell 0.87 percent, and the AUD/USD, which lost 0.89 percent.
Volatility and Volume
The VIX, which has been very active in recent trading sessions, jumped around 19 percent to 16.59 amid Wednesday's market slump. The VIX surged in the wake of Monday's sell-off and then plunged on Tuesday as stocks rebounded.
Volume was lighter than normal on Wednesday despite elevated levels of volatility in recent days. Around 73 million SPDR S&P 500 ETF (NYSE: SPY) shares traded hands on the session compared to a 3-month daily average of 127 million.
Alkermes (NASDAQ: ALKS) was trading up around 16 percent late on Wednesday after the biotech company announced positive clinical results for its ALKS-5461 drug in a mid-stage trial to treat major depressive disorder.
Atlas Energy (NYSE: ATLS) surged better than 11 percent on the session after the company announced that its subsidiary Atlas Pipeline will acquire TEAK Midstream L.L.C. for $1 billion.
Shares of Cirrus Logic (NASDAQ: CRUS) fell almost 16 percent on the day after the company issued fourth-quarter guidance which was below Wall Street estimates.
Apple (NASAQ: AAPL) fell more than 5 percent in the wake of the news from Cirrus Logic. Investors fear that Cirrus Logic's guidance may be reflective of weak earnings at Apple. Cirrus is an Apple supplier.
Textron (NYSE: TXT) lost better than 13 percent after the company reported Q1 earnings results which were below consensus and issued disappointing fiscal 2013 guidance.
Walter Energy (NYSE: WLT) fell almost 10 percent on the session after an institutional investor questioned the company's view about pricing improvements in the metallurgical coal market. Walter shares have been in a steep downtrend, losing around 37 percent in the last month alone.
Freescale Semiconductor (NYSE: FSL) fell more than 8 percent on Wednesday amid a rout in semiconductor names triggered by poor guidance from Cirrus Logic.
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