Investing.com -- U.S. stocks fell sharply for the second straight day as crude prices hit a fresh six-year low and the yen dragged down the dollar, after the Bank of Japan startled markets on Friday by unexpectedly expanding its easing program at a key policy meeting.
U.S. crude futures closed below $35 a barrel in Friday's session, falling to its lowest closing level in seven years, amid continuing signals of excessive supply on global energy markets. Oil prices have lingered near multi-year lows since OPEC spooked the energy industry last November by leaving its production ceiling above 30 million barrels. They took a further hit earlier this month when the world's largest oil cartel decided to leave its output quota unchanged in an effort to defend market share. As a result, crude prices have tumbled nearly 20% since OPEC's decision two weeks ago.
The downturn in oil has weighed heavily on U.S. equities markets in recent sessions. On Friday, the Dow Jones Industrial Average lost 367.39 or 2.10% to 17,128.45, while the S&P 500 Composite index fell 36.37 or 1.78% to 2,005.52, each suffering its worst two-day loss since late-August. The NASDAQ Composite index also dropped by 79.47 or 1.59% to 4,923.08, closing near session-lows.
On the S&P 500, all 10 sectors closed in the red, as stocks in the Financials, Energy and Consumer Goods industries lagged. In total, eight of the 10 sectors ended the session down by more than 1.3%.
Stocks were also pulled lower by the expiration of four asset classes on Friday in a quarterly event known as a "quadruple witching" hour. The event occurs four times a year on the third Friday of March, June, September and December when index futures, stock index options, stock options and single stocks all expire on the same day. Quadruple witching hours also typically result in higher than normal volatility in the markets.
The CBOE VIX Index, a gauge for market volatility, soared 1.79 or 9.29% to 20.70. Volatility has been exceedingly high over the last three sessions, after the Federal Reserve halted a seven-year zero interest rate policy on Wednesday by approving its first interest rate hike in nearly a decade on Wednesday afternoon.
The top performer on the Dow was Caterpillar Inc (N:CAT), which gained 0.49 or 0.76% to 65.39. Investors capitalized on a strong buying opportunity in Caterpillar (N:CAT), whose shares are still down by more than 25% this year. The world largest manufacturer of construction equipment has seen its stock plunge in 2015, amid a romp in mining stocks. Caterpillar was one of only two Dow components to close in the green.
Shares in Walt Disney Company (N:DIS) slumped nearly 4% to 107.57, in spite of U.S box office sales of $57 million from Star Wars: The Force Awakens on its opening night in theaters on Thursday. Investors reacted to a downgrade from analysts at BTIG, which cut Disney's outlook to $90 a share.
The worst performer was Bank of America Corporation (N:BAC), which fell 5.53 or 3.80% to 140.03, after reports surfaced that Delta Air Lines Inc (N:DAL) made a $7.7 million purchase of a used 777 jetliner on Friday. The acquisition of the relatively low-price model triggered concerns of dampened enthusiasm in the industry for Boeing (N:BA)'s wide-body jetliners.
The biggest gainer on the NASDAQ was VimpelCom (O:VIP), which added 0.25 or 8.31% to 3.26. Shares in the Russian telecom giant are still down by more than 35% over the last six months. The worst performer was Citrix Systems Inc (O:CTXS) which fell 2.95 or 3.80% to 74.71.
On the S&P 500, NRG Energy Inc (N:NRG) finished as the top performer after surging 0.85 or 8.93% to 10.37. Energy companies closed Friday's session with the three-highest gains on the index, as traders took advantage of bargain prices. Shares in Chesapeake Energy Corporation (N:CHK) and Southwestern Energy Company (N:SWN) also jumped by more than 7% on the day. All three companies still remain down by more than 60% this year. The worst performer was Williams Companies Inc (N:WMB), which plunged 2.16 or 9.11% to 21.54.
On the New York Stock Exchange, declining issues outnumbered advancing ones by a 2,008 to 1,079 margin.