Why Fear Level Among US Investors Is Increasing

The CNN Money Fear and Greed index showed an increase in the fear level among investors after US stocks closed sharply lower on Wednesday.

Energy was the worst performer in the S&P 500 index following a decline in oil and natural gas prices. The stock market is on course to record its worst year since 2008.

Southwest Airlines LUV shares continued its decline as the airlines holiday-cancellation woes continue without end in sight.

Apple Inc. AAPL shares fell to another 52-week low on Wednesday amid reports suggesting the company is concerned over iPhone sales.

The Dow closed lower by around 366 points to 32,875.71 on Wednesday. The S&P 500 fell 1.20% to 3,783.22, while the Nasdaq Composite declined 1.35% to settle at 10,213.29 in the previous session.

At a current reading of 31.0, the index remained in the "Fear" zone, compared to a previous reading of 38.0.

What is CNN Business Fear & Greed Index?

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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