Slides on lower crude prices, stock options expiry

USA stocks jumped more than one percent after the Federal Reserve announced the first interest rate hike in nine years Wednesday and promised a gradual approach to future rate hikes.

The Dow tumbled 253.25 points or 1.4 percent to 17,495.84, the Nasdaq slumped 68.58 points or 1.4 percent to 5,002.55 and the S&P 500 plunged 31.18 points or 1.5 percent to 2,041.89.

Advancing issues outnumbered declining ones on the NYSE by 4.60 to 1, while on the Nasdaq 2,089 issues rose and 751 fell for a 2.78-to-1 ratio favouring advancers.

Analysts also noted markets could see some volatility ahead of options expiration Friday.

A continued decrease by the price of crude oil also weighed on stocks, with crude for January delivery slipping $0.22 to $34.73 barrel.

Bank of America (BAC.N) was down 3.1 percent, while Wells Fargo (WFC.N) was down 3 percent and JPMorgan (JPM.N) was off 2.8 percent.

Knight Transportation ( KNX ) helped to lead the trucking sector lower, tumbling 5.9 percent after cutting its fourth quarter earnings guidance.

“It is also a sea change for market participants who will now shift their focus onto pastures new instead of being so transfixed on that first hike which many perceived as the primary market risk”. With the loss, the index fell to its lowest closing level in well over a year.

Small caps, utility and transportation stocks are significantly weaker; commodities are a fallout zone; fixed-income is being hit; emerging-market stocks are mired near their August-October lows. The euro lost 0.8 percent at $1.0848, illustrating the diverging paths of the Fed and European Central Bank. Shares of Sompo Japan are losing nearly 3 percent, while shares of Message Co. are up 0.4 percent.

The S&P 500 index showed one new 52-week high and 24 new lows, while the Nasdaq recorded 14 new highs and 74 new lows.

In the banking sector, ANZ Banking, National Australia Bank, Commonwealth Bank and Westpac are lower in a range of 0.3 percent to 1.5 percent.

The Nasdaq composite rose 75.77 points, or 1.5 percent, to 5,071.13. (NASDAQ:AMZN) and Facebook Inc (NASDAQ:FB) are all that’s preventing the major market averages from joining pretty much every other asset class to the downside.

Benchmark 10-year Treasury notes fell 3/32 in price to yield 2.2747 per cent. The yields on two-year Treasuries climbed to 1.021 per cent, the highest since April 2010 and were last at 0.9802 per cent.