A decline in oil prices rippled through markets Wednesday, triggering losses in energy stocks and currencies of commodity-exporting countries.
U.S. crude-oil prices declined 3.4% to $36.60 a barrel as Saudi Arabia reiterated its commitment to keeping oil production high and data showed an increase in U.S. crude supplies. A flood of crude has helped drive oil prices lower for more than a year.
Energy stocks led declines in the S&P 500, falling 1.5%.
The Brazilian real dropped 2.4% against the dollar, the Norwegian kroner lost 0.8% against the greenback and the Russian ruble fell 1.7% to hit its weakest level against the dollar in more than a year.
The Dow Jones Industrial Average slipped 117.11 points, or 0.7%, to 17603.87. The S&P 500 fell 0.7% and the Nasdaq Composite lost 0.8%.
Trading volumes have been light this week. Financial markets in the U.S., Europe and Japan will be closed Friday for the New Year's holiday.
Wednesday's action comes amid a lackluster month, and year, for stocks.
The S&P 500 has fallen 0.8% so far in December, and has gained 0.2% for the year. The index's 2015 advance is on track to be its smallest since 2011, when it ended little changed.
"Start to the finish, you just ended up where you started, unless you include dividends," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management. "But in between it certainly was a wild ride," he added.
That includes a bout of volatility in the summer, when fears about a slowdown in Chinese growth prompted the first correction in major U.S. indexes since 2011. A correction is defined as a drop of at least 10% from a recent high.
Signs of weakness in oil prices have kept investors cautious in recent sessions, said Brenda Kelly, head analyst at London Capital Group.
Lower commodity prices should be positive for growth and consumer spending, but the fall may not simply reflect an excess supply of oil, said Ms. Kelly.
"If it's a sign of a lack of demand or slowing growth, then you've got problems," she said.
U.S. crude prices have declined 31% this year. Stocks of oil and gas companies have tumbled in tandem, dragging the S&P 500's energy sector down 24% in 2015.
Ken Winans, president of Winans Investments, said he sold his energy stocks over a year ago and hasn't dipped back into the sector yet as oil prices continue to decline. "At this point, you've got to be a bit of a commodity trader to want to step into the oil stocks," he said. "People have tried to bottom pick these things all year long and have just gotten creamed," he added.
Elsewhere Wednesday, the Stoxx Europe 600 fell 0.5%.
Australia's S&P/ASX 200 stock index rose 1% in its ninth straight session of gains and Japan's Nikkei Stock Average edged up 0.3%, gaining for a third consecutive session.
The Shanghai Composite added 0.3%, and is on track to rise 10.5% this year, despite losing more than 40% of its value over the summer.
In other markets, gold fell 0.8% to $1,060.10 a troy ounce. The yield on the 10-year Treasury note was little changed at 2.305%, compared with 2.310% on Tuesday. Yields fall as prices rise.
Bank of America shares fell 1.3%. The bank said late Tuesday it expects to post a pretax write-down of roughly $600 million in the fourth quarter related to the redemption of $2 billion of trust preferred securities.
Billionaire Carl Icahn won a bidding war for Pep Boys-Manny, Moe & Jack, striking a deal to buy the auto parts and repair chain for about $1 billion. Shares in Pep Boys fell 2.9%.
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