In the wake of U.S. legislators in the House of Representatives rejecting the government's $700-billion rescue plan, the Dow Jones Industrial Average (DJIA) plunged over 700 points in Monday's trading. Both the S&P 500 Index (SPX) and Nasdaq Composite (COMP) fell over 8%, respectively. Below is a table of the SPX's largest down days since 1950. Today's move (as of 3:30 PM EST) was the third-largest percentage drop in 58 years.
Amid this news, fear barometers shot through the roof. The CBOE Market Volatility Index (VIX) gained 37% to 47.81. The current VIX reading is the highest reading since July 2002.
Meanwhile, below is a table of the historical returns for the SPX following a spike of 30% or more in the VIX. A quick glance at the data shows that the next couple of weeks may be bumpy for the equities markets, with a more bullish tone coming in 25 to 50 days following such VIX action.
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