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S&P 500 slips in choppy trade as energy, financials tumble

The S&P 500 edged lower on Tuesday in seesaw trade on sliding financial and energy stocks that have benefitted recently from a sharp rise in market interest rates, while beaten-down tech stocks rebounded in a reversal of trends the past few days.The VIX was recently down 0.54 points at 19.49, its lowest since Feb. 21, 2020, days before the World Health Organization declared the coronavirus outbreak a global pandemic.


A pandemic-fueled tumble that shaved about a third of the value off the S&P 500 last March pushed the VIX index to a near-record high of 85.47, a level it only topped during the global financial crisis.“There’s little new money going into the market. It is like everyone has bought in and, at some point, there’s an exhaustion of buyers and the market tends to come down a little bit,” said David Keller, chief market strategist at StockCharts.com.


The index has retreated since then, as the S&P 500 rallied 80% from its March lows to hit a fresh high on Tuesday, led by technology stocks.


Investor appear to have become more optimistic over the pandemic’s trajectory in recent weeks, as a vaccine rollout in the U.S. expands. The United States has administered 110,737,856 doses of COVID-19 vaccines and distributed 142,918,525 doses in the country as of Tuesday morning, according to the U.S. Centers for Disease Control and Prevention.


Fund managers in a monthly survey from BofA Global for the first time in a year did not name COVID-19 as the market’s top “tail risk,” citing inflation instead.


Still, the VIX remains above the 15.4 average seen for 2019.


And volatility futures expiring further out in time still remain relatively elevated, a sign that some investors continue to maintain a cautious stance.


“The coronavirus volatility spike is still lingering in investor’s memories,” Susquehanna International Group’s Chris Murphy said in a note. “Although near term volatility has decreased, the scars from Covid likely leave investors hesitant to bring down medium and longer term volatility. We saw something very similar after the great financial crisis,” Murphy said.


Advancing issues outnumbered decliners by a 1.01-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.18-to-1 ratio on the Nasdaq.


The S&P index recorded 59 new 52-week highs and no new low, while the Nasdaq recorded 218 new highs and seven new low.

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