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"Fear gauge" shows no fear Add to ...

That steady drip, drip, drip you hear coming from the stock market these days hasn't yet translated into any outright fear among investors. The S&P 500 is on track to post its sixth consecutive weekly decline, with stocks down 1.2 per cent on Friday in midday trading. Yet the CBOE Volatility Index, or VIX , continues to drift at fairly low levels.

Since stocks began to slide lower at the end of April, with the S&P 500 dipping a total of about 6.6 per cent since then, the VIX has risen from about 15 to 18.68, which is not big deal. The index rises as investors grow more nervous about future returns for the S&P 500 - hence its reputation as a fear gauge. But at a level below 19, the VIX is still low. Indeed, it suggests that investors remain relatively unconcerned by the downturn.

Consider that the VIX shot up to close to 30 in March, when stocks were on a similar - though less steady - slide following Japan's earthquake and tsunami. The index approached 35 last summer, during ongoing concerns about the European debt crisis. It rose above 40 during last year's so-called flash crash. And it passed the 80-threshold during the financial crisis, when Wall Street was imploding.

The Wall Street Journal compared today's level to that of 2002, the last time the S&P 500 endured a six-week losing streak. Back then, the VIX hovered around 30, with occasional jumps above 40 - which is about double Friday's level.

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