US stocks sink as oil shares tumble; Nasdaq down 1.73 per cent

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City on Oct 7, 2014. -- PHOTO: AFP 
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City on Oct 7, 2014. -- PHOTO: AFP 

NEW YORK (AFP) - US stocks tumbled more than 1.5 per cent Wednesday as a pullback in petroleum stocks sparked a selloff in the broader market.

At the closing bell, the Dow Jones Industrial Average stood at 17,534.50, down 266.70 points (1.50 per cent).

The broad-based S&P 500 sank 33.43 (1.62 per cent) to 2,026.39, while the tech-rich Nasdaq Composite Index plummeted 82.44 (1.73 per cent) to 4,684.03.

Beaten-down petroleum-linked stocks had another bad day as US oil prices sank to a fresh-five year low on a forecast by the Opec cartel for lower demand for its oil in 2015.

Dow member Chevron lost 2.3 per cent, Occidental Petroleum fell 3.3 per cent and oil services company Weatherford International plummeted 7 per cent.

Investors are worried about the "unknown" of "how this decline in oil prices will affect other sectors of the economy," said David Levy, portfolio manager at Kenjol Capital Management.

The S&P 500 volatility index, sometimes called the "fear index," rose to its highest level since mid-October.