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UPDATE 2-VIX 'fear gauge' ends at lowest level in nearly a year

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April Joyner
·1 min read
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(Adds commentary)

By April Joyner

NEW YORK, Feb 12 (Reuters) - The Cboe Volatility Index, known as Wall Street's "fear gauge," ended below 20 forthe first time in nearly a year on Friday.

The VIX fell 1.28 points to end at 19.97. It had not closedbelow 20 - near its long-term average - since Feb. 21, 2020,shortly before the coronavirus pandemic roiled U.S. stocks.

In March 2020, as the benchmark S&P 500 tumbled morethan 30% from its most recent high, the VIX shot up to a recordclosing level of 82.69. The fear gauge remained well above itsusual levels for months afterward. Even as U.S. stocks recoupedtheir losses and posted fresh record highs, it remainedelevated.

The VIX spent 246 consecutive sessions above 20, accordingto Refinitiv data, its longest such streak since the financialcrisis. The index spent 331 sessions above that level betweenAugust 2008 and December 2009.

In recent weeks, however, expectations for volatility inU.S. stocks have largely receded on prospects for additionalfiscal aid and a full-scale rollout of COVID-19 vaccines laterthis year.

The VIX's descent in spite of subdued movement in U.S.stocks this week bodes well for future performance, said ThomasLee, managing partner at Fundstrat Global Advisors.

"This suggests that 'fear' is receding from the market," hewrote in a research note.

(Reporting by April Joyner in New YorkEditing by Diane Craft and Matthew Lewis)