Wall Street drops, S&P 500 confirms correction

(Reuters) – U.S. stocks closed lower in a shortened post-holiday trading session on Friday as the energy sector tumbled on continued weakness in oil prices, and the benchmark S&P 500 confirmed its second correction of 2018.

Traders work on the floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., December 21, 2016. REUTERS/Andrew Kelly/Files

The three major U.S. indexes all fell well over 3 percent for the week, with the Dow industrials and the Nasdaq posting their biggest weekly percentage declines since March.

The S&P 500 ended about 10.2 percent down from its Sept. 20 closing record high, confirming it had entered a correction.

The S&P last entered a correction earlier this year after posting a then record high in late January, and falling more than 10 percent by early February. That correction lasted roughly seven months, until the index posted a fresh record high in late August.

On Friday, the S&P 500 energy sector fell 3.3 percent, dragged down by another plunge in oil prices, as fears intensified that supply would overpower demand. Oil prices have plunged some 30 percent since the start of October.

Shares of oil majors Chevron and Exxon Mobil dropped 3.4 percent and 2.7 percent, respectively.

Aside from energy, declines in Apple and Amazon weighed on the S&P 500, underscoring the drop in technology and internet stocks that has marked this latest swoon in equities.

“I see this as a continuation of the market trying to come to terms with slower growth next year,” said Alicia Levine, chief market strategist at BNY Mellon Investment Management in New York. “Today’s price action is part of that story.”

The Dow Jones Industrial Average fell 178.74 points, or 0.73 percent, to 24,285.95, the S&P 500 lost 17.37 points, or 0.66 percent, to 2,632.56 and the Nasdaq Composite dropped 33.27 points, or 0.48 percent, to 6,938.98.

Trading volume was relatively light with the session ending at 1 pm ET following the Thanksgiving Day holiday, so investors said the day’s action might carry less significance.

Volume on U.S. exchanges was about 3.4 billion shares, well below the 8.2 billion average for the full session over the last 20 trading days.

Additional reporting by Rodrigo Campos in New York, Medha Singh in Bengaluru; Editing by Anil D’Silva and Nick Zieminski

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