The downdraft was fueled in part by reports indicating weaker-than-hoped-for Black Friday sales, which weighed heavily on shares of retailers.
Investors’ dour mood also swept over into the tech-heavy Nasdaq Composite, which saw its steepest drop in seven weeks, dragged down by big declines in tech giants such as Apple, Google, Facebook, and Alibaba.
Small stocks, considered riskier than their larger counterparts, fared the worst in the down day, with the Russell 2000 falling 1.6%.
Meanwhile. commodity prices swung from trading sharply lower during Asian and European sessions to trade sharply higher during the regular market hours in the U.S. Energy and utility stocks rose in tandem with a spike in oil prices.
The S&P 500 SPX, -0.68% and the Dow DJIA, -0.29% saw their biggest one-day loss since Oct 22. The benchmark index fell 14.12 points, or 0.7%, to 2,053.44, while the Dow industrials lost 51.44 points, or 0.3%, to 17.776.80. The Nasdaq Composite’s COMP, -1.34% decline was the biggest in seven weeks, after shedding 64.28 points, or 1.3%, to 4,727.35.
Volatility on the S&P 500 as measured by the CBOE VIX index VIX, +7.20% jumped 6.5% to above 14.
Colin Cieszynski, chief market strategist at CMC markets, said U.S. stocks are due for a small pullback after the impressive six-week run.
“The fact that the technology stocks are selling off hard today is indicative of just how extended markets became,” Cieszynski added.
The heaviest-weighted stock on the S&P 500 and Nasdaq Composite, Apple Inc. AAPL, +0.24% fell 3.3%. Alibaba Group Holding Ltd. BABA, +0.24% First Solar Inc. FSLR, -6.23% Yahoo! Inc. YHOO, +0.60% Facebook Inc. FB, +0.35% and Google Inc. GOOGL, +0.06% were also hit hard.
Energy stocks rallied as WTI Intermediate CLF5, -1.61% and Brent crude oil prices LCOF5, -1.36% spiked. The S&P 500 Energy sector rose 0.7%.
Oil prices swung wildly as last week’s decision by the Organization of the Petroleum Exporting Countries to maintain production levels continued to rattle markets. WTI slid 14% last week and 18% for November, the biggest one-month fall since December 2008.
Murray Edwards, chairman of Canadian Natural Resources Ltd., and one of Canada’s biggest oil investors, predicted Friday that oil prices could collapse to $30 a barrel before stabilizing at between $70 and $75, according to Canada-based Financial Post.
Gold GCG5, -1.65% swung wildly in the aftermath of Swiss vote to reject a plan to force the Swiss National Bank to ramp up its holdings of the precious metals. Gold futures fell as much 2%, but rebounded to settle above $1,200 an ounce. Silver SIZ4, -3.20% also rebounded sharply and gained more than 5%.
News out of Asia triggered selling in equity markets round the world. Two separate gauges of Chinese factory activity indicated manufacturing had lost momentum, despite a recent cut in interest rates. Then Moody’s downgraded Japan to Aa3 from A1, citing uncertainty that the country will meet its fiscal goals and be able to grow its economy.
ISM and Black Friday sales: U.S. manufacturers expandedat a slightly slower, but still robust, pace in November, a survey of executives found.
Retailers such as Wal-Mart Inc. WMT, -1.51% Target Corp. TGT, -1.69% and Amazon.com Inc. AMZN, -0.28% sold off, after retail spending over the Thanksgiving weekend fell 11%, the second straight annual decline, according to an estimate by the National Retail Federation.
Analysts will be watching to see how sales fare on Cyber Monday, which is one of the biggest online shopping days of the year.
Quanta Services Inc. PWR, -6.56% plunged after BB&T Capital Markets cut its rating to hold from buy. Newmont Mining Corp NEM, +6.85% was the biggest gainer on the S&P 500, rallying more than 5%. Read more about the day’s big movers here.
Overseas markets: The FTSE 100 index UKX, +1.06% fell sharply as oil and mining-related stocks tracked volatile commodity prices. Other European markets also closed lower. With the exception of a gain for the Nikkei 225 index NIK, +0.42% Asian stocks ADOW, +0.42% were battered by worse-than-expected outcome for those Chinese manufacturing surveys. The Australia’s S&P ASX 200 index XJO, +1.41% slid 2%, dragged by energy stocks. The dollar USDJPY, +0.44% eased as commodity prices rebounded.
