US stock volumes match October sell-off
The two month stretch of calm in US stock markets is fraying.
Volatility soared on Wednesday as sliding energy stocks left the S&P 500 nursing its steepest one-day decline in almost two months.
The S&P 500 slid 1.6 per cent to 2,032.23, under the weight of oil and gas drillers. Twelve stocks fell on the index for every one that rose.
The technology-heavy Nasdaq Composite fell 1.7 per cent to 4,683.34 while the Russell 2000, the US small-cap home, slipped 1.8 per cent to 1,166.75.
Energy stocks followed the oil price lower. Crude fell after a report from a US government agency showed comfortable stockpiles of oil in the US. Earlier in the day, the oil cartel Opec lowered its forecast for 2015 demand.
Brent, the international oil benchmark, dropped 3 per cent to $64.61 following the report, while West Texas Intermediate, the US oil standard, slid 4 per cent to $61.36.
Those declines added to the pressure on the S&P 500 energy index which slumped 4 per cent to take its decline this year to 15 per cent.
The CBOE's VIX volatility index, which measures the expected change in the S&P 500 over the coming month, hit its highest level since mid-October, when the benchmark index came within a hair of a technical correction of 10 per cent.
Airlines proved a rare point of strength, rallying on the crude price drop. The industry's fuel bill could be cut by $10bn if jet fuel prices remain near current levels, analysts with Barclays note.
More than 7.3bn shares traded hands on the New York Stock Exchange, Nasdaq and NYSE MKT, 13 per cent above the trailing 30-day average.
Wednesday marked the first day volumes had eclipsed 7bn on the three exchanges for three consecutive days since volatility cooled at the end of October.