NEW YORK – U.S. stocks sank Monday, capping the worst three-day loss for the Standard & Poor’s 500 index since 2011, as investors weighed prospects for slowing global growth and the spread of Ebola.
Halliburton, Dow Chemical and Merck & Co. lost at least 4.3 percent to pace declines in energy, commodity and health-care companies that led the market lower. Spirit Airlines, United Continental Holdings and American Airlines Group sank more than 7 percent as the Bloomberg U.S. Airlines Index extended its loss since Sept. 2 to 22 percent.
The S&P 500 slid 1.6 percent to 1,874.74, falling below its average from the past 200 days of 1,905 for the first time in two years. The index extended its three- day drop to 4.8 percent and closed at the lowest since May 20. The Dow Jones industrial average sank 223.03 points, or 1.3 percent, to 16,321.07. The Nasdaq composite index sank 1.5 percent and the Russell 2000 index declined 0.4 percent.
“It seemed like we were finally having a little slowing in selloff momentum, but obviously the bears won out here,” Joe Bell, a senior equity analyst in Cincinnati at Schaeffer’s Investment Research, said by phone. Ebola is adding to “overall uncertainty and fear amongst Americans. Energy and oil are continuing to take a beating and are leading the market lower.”
Benchmark stock indexes fluctuated between gains and losses for much of the day before extending declines in the final two hours of trading as the S&P returned below its 200-day average.
Medical crews surrounded an Emirates Airline plane at Boston’s Logan Airport and five passengers aboard the flight from Dubai were taken off, WCVB reported, though there was no indication the sick travelers had Ebola.
The Chicago Board Options Exchange volatility index, the benchmark gauge of U.S. options prices, jumped 16 percent to 24.64, the highest level since June 2012. The so-called VIX, which gauges the cost of options to protect against further declines in equities, was down for the day before stocks extended declines in the final 90 minutes of the session.
“It looked like there were sell programs set up to sell off when the S&P looked like it was going to close below the 200-day moving average,” Randy Frederick, managing director of trading and derivatives at Charles Schwab, said by phone from Austin, Texas. “My guess is that it’s probably going to be weak in the morning.”
The S&P 500 has lost 6.8 percent from its last record closing level on Sept. 18, its worst retreat from a high since 2012.
A rout in global equities wiped $1.54 trillion from shares last week, with the S&P 500 tumbling 3.1 percent for its worst drop in two years, amid growing concern of an international economic slowdown. Chicago Fed President Charles Evans today reiterated his concern that inflation may rise only slowly to the U.S. central bank’s 2 percent goal and said policy makers should be “exceptionally patient” in adjusting monetary policy.
Fed officials said over the weekend that the threat from overseas may lead to rate increases being delayed. The remarks highlighted mounting concern over the improving U.S. economy’s ability to withstand foreign weakness and a strengthening dollar.
