Wall Street capped a turbulent week of trading Friday with the biggest weekly loss since March as traders fret over rising trade tensions between Washington and Beijing and signals of slower economic growth.
The latest wave of selling erased more than 550 points from the Dow Jones Industrial Average, bringing its three-day loss to more than 1,400. For the week, major indexes are down more than 4 percent.
Worries that the testy U.S.-China trade dispute and higher interest rates will slow the economy has made investors uneasy, leading to volatile swings in the market from one day to the next.
Dispute between U.S. and China
On Monday, news that the U.S. and China had agreed to a 90-day truce in their escalating trade conflict drove stocks sharply higher, adding to strong gains the week before. The next day, as doubts mounted over the likelihood of a swift resolution to the trade dispute, stocks sank. On Friday, another early rally faded into another sharp drop.
"We're in a market where investors just want to sell any upside that they see," said Lindsey Bell, investment strategist at CFRA. "The volatility we've seen the last couple of weeks has been pretty extreme in both directions."
The S&P 500 index fell 62.87 points, or 2.3 percent, to 2,633.08. The index has ended lower three out of the last four weeks. The Dow dropped 558.72 points, or 2.2 percent, to 24,388.95.
The Nasdaq composite slid 219.01 points, or 3 percent, to 6,969.25. The Russell 2000 index of small-company stocks gave up 29.32 points, or 2 percent, to 1,448.09.
The S&P 500 and Dow are now in the red for the year again. The Nasdaq was holding on to a modest gain.
Markets upset since October
Volatility has gripped the market since early October, reflecting investors' worries that the Federal Reserve might overshoot with its campaign of rate increases and hurt U.S. economic growth.
Traders also fear that a prolonged trade dispute between the U.S. and China could crimp corporate profits and that tariffs will raises costs for businesses and consumers. Uncertainty over those issues helped drive the market's sell-off this week.
"The Fed has taken the punch bowl away in getting back to rates where they are today," said Doug Cote, chief market strategist for Voya Investment Management. "We're also going to get back to more normal volatility."
At the same time, traders are also worried about a sharp drop in long-term bond yields as investors plow money into Treasurys, which tends to happen when investors expect slower economic growth.
Technology stocks accounted for much of the market's broad slide Friday. Chipmaker Advanced Micro Devices slid 8.6 percent to $19.46.
Health care stocks take big hit
Health care sector stocks, the biggest gainer in the S&P 500 this year, took some of the heaviest losses. Medical device company Cooper lost 12.3 percent to $243.01.
Utilities, which investors favor when they're fearful, eked out a slight gain. PPL Corp. gained 2.8 percent to $31.09.
Oil prices rose after OPEC countries agreed to reduce global oil production by 1.2 million barrels a day for six months, beginning in January. The move would include a reduction of 800,000 barrels per day from OPEC countries and 400,000 barrels per day from Russia and other non-OPEC nations.
The news, which had been widely anticipated, pushed crude oil prices higher. U.S. benchmark crude rose 2.2 percent to $52.61 a barrel in New York. Brent crude, used to price international oils, gained 2.7 percent to $61.67 a barrel in London.
The Labor Department said U.S. employers added 155,000 jobs in November, a slowdown from recent months but enough to suggest that the economy is expanding at a solid pace despite sharp gyrations in the stock market. The unemployment rate remained at 3.7 percent, nearly a five-decade low, for the third straight month.
Bond prices rose, sending yields slightly lower. The yield on the 10-year Treasury fell to 2.86 percent from 2.87 percent late Thursday.
The decline in bond yields, which affect interest rates on mortgages and other consumer loans, weighed on banks, which make more money when rates are rising. Morgan Stanley slid 3 percent to $41.32.
The dollar rose to 112.66 yen from 112.65 yen late Thursday. The euro strengthened to $1.1418 from $1.1373.
Small gains for gold, silver
Gold gained 0.7 percent to $1,252.60 an ounce. Silver climbed 1.3 percent to $14.70 an ounce. Copper added 0.6 percent to $2.76 a pound.
In other commodities trading, wholesale gasoline climbed 3.7 percent to $1.49 a gallon. Heating oil rose 1.5 percent to $1.89 a gallon. Natural gas gained 3.7 percent to $4.49 per 1,000 cubic feet.
In Europe, Germany's DAX dipped 0.2 percent while the CAC 40 in France rose 0.7 percent. Britain's FTSE 100 jumped 1.1 percent. Major indexes in Asia finished mostly higher.
Japan's benchmark Nikkei 225 added 0.8 percent and Australia's S&P/ASX 200 gained 0.4 percent. South Korea's Kospi rose 0.3 percent. Hong Kong's Hang Seng gave up 0.3 percent.