NEW YORK (Reuters) - U.S. stocks fell on Wednesday on continued worries about weak global demand, but managed to close well above session lows that briefly pushed the S&P 500 and Nasdaq into negative territory for the year.
Small-caps and energy shares, which have been among the market’s weakest performers, provided some late-day strength, with the Russell 2000 index .TOY ending up 1 percent and the S&P energy index .SPNY up 0.4 percent.
The potential impact of global economic weakness on U.S. earnings has been chief among the market’s concerns, while the spread of the Ebola virus also has rattled markets. A second nurse in Texas tested positive for the Ebola virus, a week after Thomas Eric Duncan, the first Ebola patient diagnosed in the United States, died.
The day’s losses threatened to wipe out 2014 gains for the S&P 500 and Nasdaq, with the S&P 500 down more than 3 percent at its session low. The Dow industrials fell further into the red for the year, and closed down for the fifth consecutive session.
The pace and depth of the selloff have surprised many investors, who have banked on the market closing out the year with at least modest gains. The S&P 500 is now down 7.4 percent from its Sept. 18 record closing high, and is up just 0.8 percent for the year.
“It seems like we got through a good chunk of the year with almost no volatility and almost no movement and in the last month, suddenly the trading community seems to have taken over the stock market like it did several years back,” said Eric Kuby, chief investment officer, North Star Investment Management Corp, in Chicago.
Kuby said while his firm has not made any major switches in its allocations, it has moved funds out of energy producers and into consumers of energy.
The S&P 500 traded in a 57-point range, the widest since August 2011.
“If you look at the lows of the day, maybe we’ve put in a little bit of a trading bottom here. But there’s concern about an absence of aggregate demand in the world, and that’s really what’s weakening the market,” said David Joy, chief market strategist at Ameriprise Financial in Boston.
The Dow Jones industrial average .DJI fell 173.45 points, or 1.06 percent, to 16,141.74, the S&P 500 .SPX lost 15.21 points, or 0.81 percent, to 1,862.49 and the Nasdaq Composite .IXIC dropped 11.85 points, or 0.28 percent, to 4,215.32.
Volume surged. About 11.9 billion shares changed hands on U.S. exchanges, a nearly 50 percent increase from the average daily volume so far this month, according to data from BATS Global Markets.
Options activity has also spiked along with the market’s recent slide. Total options volume at the close on Wednesday was 33 million contracts, the busiest day since Aug. 8, 2011, according to Trade Alert.
After the bell, shares of Netflix (NFLX.O) dropped 25 percent to $336.33 following quarterly results, including net subscriber additions that were below its forecast. [
On the U.S. economic front, the day’s data showed U.S. retail sales and producer prices fell in September, while manufacturing activity in New York slowed to its weakest pace since April.
Declining issues outnumbered advancing ones on the NYSE by 1,655 to 1,466, for a 1.13-to-1 ratio on the downside; on the Nasdaq, 1,500 issues rose and 1,225 fell.
Editing by Nick Zieminski