Panic hits Wall Street on the Open/ Dollar Soars against Euro and Pound

Unadulterated panic hit Wall Street at its open on Monday morning, but the major indexes were recently managing to climb off their lows. The DOW plunged 574.78 points (-5.57%) after one hour and fifteen minutes of trading, but has recently managed to gain nearly 157 points of that loss back. The broader S&P gapped 27.27 points (-2.48%) lower at the open and had declined a total of 6.45% from Friday's close by 10:45 EDT.

The CBOE Volatility Index, widely considered to be one of the best gauges of fear in the market, rose more than 17% to a record above 50.

The dollar soared against the euro and pound, gaining 1.71% and 1.80% respectively, but it was the opposite against the yen as the dollar declined a massive 3.68% against Japan's currency. "This type of movement is a pure risk-aversion play," said Matthew Carniol, chief currency strategist at TheLFB-forex.com. "As risk comes out of the market and carry trades unwind, the dollar gains against the high yielding currencies as it declines against the low-yielding yen."

In recent trade stocks were off their lows of the day although rather large declines were still on the board. The DOW was trading down by 4.74% while the broader S&P 500 and tech-heavy NASDAQ were declining 5.32% and 5.68% respectively. Crude oil for October delivery was recently down $4.41 (-4.69%) to $89.54 per barrel as traders speculated that slowing global economies would crimp demand. Gold futures for December delivery were catching a bid and were recently up $26.60 (3.21%) to $855.50 per ounce as traders sought a safe haven. Traders in Fed Funds Futures are now pricing in 75 basis points of easing on or before the Fed's October 28-29 meeting.

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