Slide in Energy Sector Drags U.S. Stock Market Lower 


Stocks fell broadly on Wednesday, snapping a four-day winning streak for the Standard & Poor’s 500 index, as investors shaken by recent swings in the market sold some of their holdings.

A slide in the price of oil dragged down energy stocks. Eight of the 10 industry groups in the S&P 500 fell, led by a 1.7 percent drop in energy. Small-company stocks also fell as traders unloaded riskier assets.

The drop in the S&P 500 came a day after the index’s biggest gain this year.

Stocks were higher most of the morning on hopes that the European Central Bank would add to its stimulus program as well as news that U.S. inflation remained low last month. A batch of good earnings reports from U.S. companies also helped.

Those gains vanished in the afternoon as the price of crude oil began to drop. Traders have worried about a steady decline in oil as global demand for energy recedes.

The S&P 500 dropped 14.17 points, or 0.7 percent, to 1,927.11. TheDow Jones industrial average fell 153.49 points, or 0.9 percent, to 16,461.32. The Nasdaq composite fell 36.63 points, or 0.8 percent, to 4,382.85.

The losses were mitigated by a batch of generally positive third-quarter earnings reports, which suggested that corporate profits were still growing at a healthy clip. Yahoo jumped 5 percent after reporting blowout earnings.

The closely watched VIX index, a gauge of expected swings in stock prices, surged nearly two points to 18. That is above the recent average of 15, but far below last week’s high of 30.

So far this earnings season, investors have been encouraged. With about a fifth of S&P 500 companies out with their results and outlooks, stocks look reasonably priced as measured by expectations of future earnings. The index is trading at 15.8 times expected earnings per share over the next 12 months, according to S&P Capital IQ, a research firm. That is not much lower —  meaning cheaper — than the average of 16.4 since 2001.

But other measures, comparing stock prices to earnings over the past 10 years, for instance, suggest the market may be overvalued.

Investors will get a clearer view on Thursday, a big day for earnings across industries. Those reporting include Microsoft, 3M,, Caterpillar and United Continental.

The price of oil fell sharply after the Energy Department reported an increase in oil inventories that was far larger than analysts expected. The benchmark U.S. crude contract fell $1.97 to $80.52 a barrel in New York.

Brent crude, a benchmark for international oils used by many U.S. refineries, fell $1.51 to close at $84.71 on the ICE Futures exchange in London.

In other energy futures trading on the NYMEX, wholesale gasoline fell 5.7 cents to close at $2.156 a gallon, heating oil fell 4.0 cents to close at $2.473 a gallon and natural gas fell 5.2 cents to close at $3.659 per 1,000 cubic feet.

Bond prices didn’t move much. The yield on the 10-year Treasury note held steady at 2.22 percent.

Gold fell $6.20 to $1,245.50 an ounce, silver fell 32 cents to $17.23 an ounce and copper fell a penny to $3.02 a pound.