A strong morning rally for stocks turned into an afternoon sell-off Wednesday, reminding investors that the market remains volatile.
Stocks started the day with gains on optimism that policymakers in Asia will do more to help boost growth in the region. Japan’s stock market logged its biggest gain in almost seven years after comments from the country’s prime minister raised expectations of more measures to shore up economic growth.
The market then drifted gradually lower after a good-news-is-bad-news moment for investors. A government report released at midmorning showed that the number of available jobs jumped in July to the highest level in 15 years.
That added to evidence that hiring remains strong and might prompt Federal Reserve policymakers to raise interest rates at their meeting later this month.
By the close, the Dow Jones industrial average had swung more than 400 points from its peak of the day. The index had surged a day earlier, logging its second-best day of the year.
The Dow ended 239.11 points, or 1.5 percent, lower at 16,253.57. The Standard & Poor’s 500 index dropped 27.37 points, or 0.8 percent, to 1,942.04. The Nasdaq composite fell 55.40 points, or 1.2 percent, to 4,756.53.
Declines on Wednesday were led by energy stocks, which fell as the price of oil slumped for a third straight day.
Oil dropped on concerns that global supplies are still outpacing demand. U.S. crude fell $1.79 to close at $44.15 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, fell $1.94 to close at $47.58 in London.
At the open, investors had focused on some encouraging news out of Asia.
Japan’s Nikkei 225 soared after comments from Prime Minister Shinzo Abe that raised expectations of more measures to shore up economic growth under his “Abenomics” stimulus program. The Nikkei surged 7.7 percent, its biggest one-day rise since October 2008.
Investors were also comforted by comments from China’s No. 2 leader, who tried to ease concerns about the nation’s economic slowdown. Premier Li Keqiang said the nation’s growth is in the “proper range” and Beijing has no plans to allow its currency to decline further after the surprise devaluation Aug. 11.
Among individual stock movers, Barnes & Noble was a big loser. The book retailer’s stock sank $4.50, or 28 percent, to $11.80 after it reported a wider first-quarter loss as sales of its Nook e-reader and digital books fell sharply. Its college bookstore business, which was the only unit to post an increase in sales in the quarter, was spun off last month.
Netflix was the biggest gainer in the S&P 500 index. The video streaming company snapped a seven-day losing streak, gaining $4.23, or 4.5 percent, to $99.18 after the company said it would bring its service to four more Asian countries next year.
