NEW YORK — One day after the market had its best day of 2014, it had its worst day of 2014.
The Dow Jones Industrial Average plunged 334.97 points, or 2 percent, Thursday to close at 16,659.25, as a decline in energy stocks and worries about the global economy sent investors fleeing.
It was the Dow's biggest drop since June 2013 and the third straight day investors were taken on a wild roller-coaster ride. On Tuesday, the Dow fell 272.52 points. Wednesday it jumped 274.83 points. Though 100-plus-point moves in the Dow have become more common as stocks have risen to record highs, 200-plus-point moves had been rare until this week.
"The violent gyrations are causing havoc for fund managers and active investors (who were) hoping for a smooth fourth quarter," said Todd Schoenberger of J. Streicher Asset Management.
After more than three years of the stock market moving quietly, steadily higher, volatility is back and in a big way, market observers say. The market hasn't seen day-to-day movements like this since August 2011, when Standard & Poor's downgraded the United States' credit rating. The downgrade subsequently pushed the market into its most recent "correction," a technical term for when stocks fall 10 percent or more from a recent peak.
Stocks fell at the opening of trading Thursday, and the selling accelerated once European markets closed at midday.
Few companies were spared from the selling. All 30 members of the blue chip Dow index fell, and 482 of the 500 companies in the S&P 500 index ended the day lower. The S&P lost 40.68 points, or 2.1 percent, to close at 1,928.21 on Thursday.
Worries about the global economy, particularly in Europe and Asia, were once again center stage. A large part of Thursday's selling happened in energy stocks, particularly oil and coal companies.
The price of oil fell sharply again, continuing its multiweek decline, on concerns that global production remains high despite signs that demand is slowing.
Earlier this week, the International Monetary Fund cut its outlook for this year and next for the global economy, citing weakness in Japan, Latin America and particularly Europe.
"Europe is struggling," said Jurrien Timmer, director of global macro at Fidelity Investments. "Asia is struggling. Japan is struggling. The United States is the best house on the block at the moment."
Benchmark U.S. crude fell $1.54 to $85.77 a barrel on the New York Mercantile Exchange, a third straight decline of more than 1.5 percent. Oil is now 20 percent below its 2014 peak of $107.26 a barrel, reached in late June.
Sinking crude prices mean lower future profits for oil and gas companies, and investors responded accordingly. The energy sector of the S&P 500 fell nearly 4 percent, far more than the rest of the market. Exxon Mobil and Chevron, the nation's two largest oil and gas companies, each fell roughly 3 percent.
Average investors who might be worried about the market's recent volatility should remain calm, Fidelity's Timmer said. The market has gone up for three straight years, and the S&P 500 index is still up 4.3 percent this year.
"Just stick to your long-term (retirement) plan," Timmer said. "You don't want to sell at the bottom and buy at the top."