Stock Market Rally Comes to Abrupt End

February 25, 2013 5:59 PM EST
On Monday an impressive, 2-month rally that began in early January came to an abrupt end, with the S&P 500 crumbling 1.8 percent and the Dow Jones shedding 1.6 percent. The decline is being blamed on elections in Italy, but many view today's correction as long overdue and in some ways healthy.

The correction was accompanied by a massive spike in implied volatility on the S&P 500 (VIX). Often called the fear index, VIX climbed by an impressive 34 percent to close at 19, one point shy of the psychological 20 handle.

The decline hit most major sectors of the market, with financials taking its fair share of damage. Bank of America Corporation (NYSE: BAC) declined 3.6 percent and Citigroup, Inc. (NYSE: C) was lower by 3.8 percent. Goldman Sachs Group (NYSE: GS) closed down 4.2 percent.

Blue chip General Electric (NYSE: GE) declined 2.5 percent with heavy volume and aggressive selling. Caterpillar (NYSE: CAT), Boeing (NYSE: BA), United Technology (NYSE: UTX), 3M (NYSE: MMM) – few were spared.

Volume picked up late in the day and markets closed on lows, an ominous sign say some traders.

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