Stocks fall with VIX near lows

Stocks closed lower on Wednesday.

The S&P 500 fell 0.4 percent, dragged down by the energy sector as US crude oil fell 2.5 percent.

The STOXX Europe 600 fell 0.2 percent, its first decline after five consecutive days of gains.

Asian stocks also fell. The Nikkei 225 and the Shanghai Composite Index both fell 0.2 percent.

Stocks have been drifting lower amid low trading volumes. “Volumes have been very low as investors seem to be waiting for major market catalysts,” said Angus Nicholson, a market analyst for IG, in a note on Wednesday.

The quiet market is making some investors uneasy. CNN Money reports:

The closely-watched VIX volatility index recently slipped below 11.4, touching its lowest level in more than two years. By comparison, the measure of market turbulence was sitting at nearly 31 last September and it's almost never been in single digits.

Some see this, along with a string of record highs for the American stock market, as a sign that investors have become so comfortable with the state of things that they don't see the dangers that lurk around them. They argue this is the calm before the storm, especially given nervousness about the global economy, the upcoming U.S. elections and Corporate America's yearlong profit recession.

On the other hand, Mark Hulbert thinks that the concerns over the low VIX reading is unwarranted.

According to data from the CBOE, Hulbert said that the stock market’s return whenever the VIX falls below 12 is virtually the same as it is whenever the VIX is above its historical median of 18.6.