S&P 500 sees biggest drop in 3 months after plane crash

Reuters
Traders work on the floor of the New York Stock Exchange
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Traders work on the floor of the New York Stock Exchange July 17, 2014. REUTERS/Brendan McDermid

REUTERS - The S&P 500 posted its biggest one-day percentage decline since April 10 as news of a Malaysian Airlines passenger jet crash near the Ukraine-Russia border sent shivers across markets.

Investors dumped riskier assets like stocks, while the CBOE Volatility index jumped 32.2 percent, its biggest daily percentage gain since April 2013. It closed at 14.54, its highest level since April 15.

"I'm putting today into the 'noise' category for now," said Michael Mullaney, chief investment officer at Fiduciary Trust Co in Boston.

"We're absolutely trading on eggshells though," he said, noting that the market was "already ripe for a correction."

The iPath S&P 500 VIX ST Futures ETN jumped 9.8 percent, with consolidated volume last at more than 77 million.

Almost 300 people died in the crash, caused by a missile fired at the plane, according to a Ukrainian official. The incident follows an increase in tensions between Ukraine and Russia that has resulted in clashes along the border.

The NYSE Arca airline index fell 2.6 percent with shares of most major U.S. carriers down sharply. American Airlines lost 4.1 percent.

The Market Vectors Russia exchange-traded fund fell 7.2 percent, with consolidated volume last at roughly 25 million shares.

After the bell, share of Google rose 1.9 percent following the release of its results and news that its chief business officer is leaving the company. Also after the close, shares of Advanced Micro Devices dropped 15.8 percent following its results.

Declining issues outnumbered advancing ones on the NYSE by 2,476 to 563, for a 4.4-to-1 ratio on the upside. On the Nasdaq, decliners outpaced advancers by 2,171 to 518.

About 6.7 billion shares changing hands on U.S. exchanges, above the 5.5 billion average for the month to date, according to data from BATS Global Markets.

Index snapshot at the close:

* S&P 500 down 23.45 points, 1.18 percent.

* Nasdaq Comp down 62.52 points, 1.41 percent.

* Dow industrials down 161.39 points, 0.94 percent.

* Russell 2000 down 17.95 points, 1.56 percent.

* S&P MidCap down 15.34 points, 1.09 percent.

* S&P SmallCap off 8.67 points, 1.31 percent.

(Reporting by Rodrigo Campos and Caroline Valetkevitch)

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