Investing.com -- U.S. stocks fell broadly on Wednesday as strong employment data and hawkish comments from Federal Reserve chair Janet Yellen bolstered possibilities for a December rate hike, offsetting gains from a potential shakeup at YHOO.
Investors also reacted to sharp declines in crude prices and reports of a mass-shooting east of Los Angeles on Wednesday afternoon, just before the close of trading.
The Dow Jones Industrial Average fell 158.67 or 0.89% to 17,729.68, as shares in Exxon Mobil Corporation (N:XOM) and Chevron Corporation (N:CVX) weighed. A steady build in U.S. crude inventories and a strong dollar that surged to yearly-highs on Wednesday pushed crude futures below $40 a barrel, its lowest closing level since late-August. With the sell-off in the afternoon session, the Dow fell back into negative territory for the year.
The NASDAQ Composite index also lost 33.09 or 0.64% to end the session at 5,123.22. Earlier on Wednesday, the NASDAQ rose to four and a half month highs after the Wall Street Journal reported that Yahoo (O:YHOO) could sell its core Internet assets and decide the fate of CEO Marissa Mayer's future with the company when it meets later this week.
The S&P 500 Composite index, meanwhile, dropped by 23.12 or 1.10% to 2,079.51, as all 10 of its sectors closed in the red. Stocks in the energy and utilities industries lagged, each falling by more than 2%.
In an address before the Economic Club of Washington on Wednesday afternoon, Yellen indicated that a wave of economic and financial data since the Fed last met in October has fallen in line with its expectations of improvements in the U.S. labor market. Yellen also noted that waiting to normalize monetary policy much longer could encourage excessive risk-taking and could inadvertently create the potential for recession. The Fed chair cautioned that unexpected economic developments ahead of its two-day meeting on Dec. 15-16 could sway its decision.
A rate hike is generally viewed as bearish for equities, as investors exit from their positions in favor of higher yields in the fixed income markets.
The top performer on the Dow was UNH, which gained 1.38 or 1.19% to 117.64. It came one day after UnitedHealth Group (N:UNH) CEO Stephen Hemsley's defended the company's proposed move to discontinue coverage on Obamacare state-run insurance exchanges. The worst performer was Exxon Mobil Corporation (N:XOM), which fell 2.34 or 2.86% to 79.55, ahead of Friday's key OPEC meeting in Vienna.
The biggest gainer on the NASDAQ was Yahoo, which rose 1.94 or 5.75% to 35.65. Along with an overhaul of its executive team, the internet giant could also move forward with a potential $30 billion spin-off of Chinese e-Commerce company Alibaba Group Holdings Ltd (N:BABA). In September, the deal hit a snag when the Internal Revenue Service announced that the divestiture would not be granted tax-free status. Revenue growth at Yahoo has fallen more than 10% since Mayer was appointed as the head of the company in July, 2012. The worst performer was CH Robinson Worldwide Inc (O:CHRW), which fell 4.37 or 6.43% to 63.58.
Yahoo was also the top performer on the S&P 500, just above Qualcomm Incorporated (O:QCOM) which gained 2.55 or 5.12% to close at 51.85. The worst performer was NRG Energy Inc (N:NRG), which fell 1.56 or 12.63% to 10.79. U.S. crude futures tumbled more than 4% on the session to fall to near six-year lows.
Police in Southern California were reportedly searching for at least three suspects on Wednesday afternoon in a shooting in San Bernardino outside a regional facility that helps serve people with disabilities. Three people were shot to death and at least 20 were wounded, according to California news station KNBC.