New York: Wall Street snapped a three-day winning streak on Tuesday, even as investors adjusted to the insecurity created by events in Japan, the Middle East and North Africa.
The CBOE Volatility Index fell 1.9% to 20.21, leaving it not far from its level before the crisis in Japan sparked a huge spike in the VIX, suggesting investors have become acclimated to Japan’s biggest-ever earthquake and the toppling of governments across the Arab world.
The VIX has tumbled 31.6% in the last four days.
“There is a palpable difference in the kind of intensity that someone like myself feels being on the trading floor,” said Gordon Charlop, managing director at Rosenblatt Securities in New York.
Volume was the lowest of the year, with 6.52 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, pointing to a lack of conviction. Average daily volume is 8.09 billion shares.
Fighting in Libya and unrest in Yemen have contributed to rising oil prices, which has dragged on equities. April US crude futures rose $1.67 to settle at $104 a barrel while Brent added 74 cents to settle at $115.70.
“Those that are still bullish are trying to buy on dips and took advantage of the prices from the middle of last week. But as far as upward momentum, I don’t think it’s there anymore,” said Terry Morris, senior equity manager at National Penn Investors Trust Company in Reading, Pennsylvania.
“So it’s a wait-and-see attitude and and not a lot of commitment from either side at this point.”
According to a recent report from EPFR Global, fund flows “took a marked turn towards the defensive in mid-March,” following the crisis in Japan, with greater flows to funds oriented in consumer goods, telecom and health care.
The Dow Jones industrial average shed 17.90 points, or 0.15%, to 12,018.63. The Standard & Poor’s 500 Index dropped 4.61 points, or 0.36%, to 1,293.77. The Nasdaq Composite Index fell 8.22 points, or 0.31%, to 2,683.87.
European Central Bank President Jean-Claude Trichet and other ECB policymakers have reiterated they are ready to act quickly to guard against inflation, despite the impact of Japan’s disasters.
Walgreen Co was the S&P 500’s biggest percentage loser, falling 6.6% to $39.21 after it reported its quarterly results.
One of the S&P’s top percentage gainers was Netflix Inc, which rose 4% to $$221.39 after Credit Suisse upgraded the stock to “outperform.”
After the closing bell, Adobe Systems Inc climbed 1.4% to $33.33 and Jabil Circuit Inc jumped 10.5% to $20.91. Both companies reported quarterly results after the regular stock trading session ended.
Declining stocks outnumbered advancing ones on the New York Stock Exchange by 1,703 to 1,262, while on the Nasdaq, decliners beat advancers by 1,540 to 1,052.