Markets: Wall Street hits two-month low amid euro fear
Renewed fear of contagion effect in Europe following Spanish bank nationalisation shakes markets.
American equity indices experienced another rough session overnight as volatility spiked due to increasing investor concern over possible further bad news out of Europe, on a day when Spain announced it was nationalising banking group Bankia.
Volatility, as measured by the Chicago Board Options Exhange’s Vix index and often referred to as Wall Street’s ‘fear gauge’, rose up to 13 per cent during the day before calming fractionally in later trading.
This was fuelled largely by fears that economic problems in Greece could spill over into other teetering European countries, particularly Spain and France.
The S&P 500 finished 0.7 per cent down, after a 9 point drop to 1,354. The Dow showed the largest proportional drop of the US equity indices, falling three quarters of a percent and 97 points to close at 12,835, while the Nasdaq Composite was down 0.4 per cent to close at 2,934.
Poor market performance was cheered somewhat by good news from Disney, which reported that high attendance at its theme parks boosted revenue despite a $200m writedown on a failed film, beating market estimates for its second-quarter earnings. Shares in the company rose 1.6 per cent.