Stocks plunged across all sectors in the heaviest trading of the year Friday as enthusiasm over a long-awaited increase in U.S. interest rates faded.
Several other negative factors combined to give the market its second big loss in a row, bringing the indexes lower for the week.
Bank stocks, which investors had bid up in hopes they would become more profitable as loan rates climbed, fell the most. Technology shares suffered more declines as a bad December got worse for Apple. The world's most valuable publicly traded company sank again, bringing its monthly loss to 10 percent.
Overseas, Japan's market sank after that country's central bank made changes to a stimulus program that fell short of what investors were hoping for. Another drop in energy prices sent oil stocks lower again, and worries about weak global growth weighed on shipping and other transportation companies.
The Dow Jones industrial average dropped 367.29 points, or 2.1 percent, to 17,128.55. The S&P 500 index fell 36.34 points, or 1.8 percent, to 2,005.55. The Nasdaq composite sank 79.47 points, or 1.6 percent, to 4,923.08. All 10 Standard & Poor's 500 sectors fell.
U.S. stock trading was even more volatile than usual Friday because of the simultaneous expiration of several kinds of futures and other contracts that investors use to place bets on indexes and individual stocks. As a result Friday was the busiest trading day of the year for stocks.
The market ended a tumultuous week slightly lower. Stocks had rallied over the first three days and jumped Wednesday after the Federal Reserve raised interest rates for the first time in almost a decade. The move was a vote of confidence in the U.S. economy. But over the next two days stocks were hit by some of the worries that have dogged them all year, like weakness in the Chinese economy, slowing global growth, and skidding prices for energy and metals.
While the Bank of Japan plans to spend a bit more on exchange-traded funds for companies that increase hiring and investment, investors were hoping for more, according to Ryan Larson, head of U.S. equity trading for RBC Global Asset Management.
"They were looking for more, and when the market's disappointed, this is what you get," he said.
The global market went into a similar slide two weeks ago, when the European Central Bank ramped up its stimulus efforts but didn't do nearly as much as expected. Stocks rallied after ECB President Mario Draghi said the bank is ready to expand its stimulus program further if needed.
Those slumps show that investors will continue keeping an eye on the words and deeds of central banks in struggling Europe and Japan as well as the U.S. for the foreseeable future.
The Federal Reserve had kept interest rates near zero for seven years. Fed Chair Janet Yellen emphasized that despite the boost, interest rates will remain low for some time. That pleased investors overall, but it eventually put pressure on bank stocks. Banks will benefit from higher interest rates and have and have rallied over the last few months, but the initial benefits won't be great.
Goldman Sachs dropped $7.12, or 3.9 percent, to $175.49 and ETrade Financial lost $1.13, or 3.8 percent, to $28.82. Citigroup gave up $1.63, or 3.1 percent, to $51.21.
Tech stocks also slumped. Apple fell $2.95, or 2.7 percent, to $106.03. The stock has fallen 10 percent in December and has risen only three days this month. Microsoft fell $1.57, or 2.8 percent, to $54.13.
Transportation stocks also fell. Shares of J.B. Hunt Transportation surrendered $1.96, or 2.7 percent, to $70.62 and Ryder System lost $2.59, or 4.6 percent, to $54.08.
Used car dealership chain CarMax disclosed disappointing quarterly results, as its profit and sales both fell short of analyst projections. Its stock lost $3.66, or 6.4 percent, to $53.49.
The news wasn't all bad. Darden Restaurants, the owner of Olive Garden and other chains, climbed after the company raised its outlook for the year. Olive Garden sales rose and the company's profit was better than analysts were expecting. The stock added $4.11, or 7 percent, to $62.50.
U.S. crude fell 22 cents to $34.73 a barrel in New York. Oil is trading at its lowest level in almost seven years and has slumped over the last two days. Brent crude, a benchmark for international oils, slipped 18 cents to $36.88 a barrel in London. Natural gas, which has sunk to 16-year lows as demand fell, picked up 1.2 cents to $1.767 per 1,000 cubic feet.
Offshore oil drilling companies skidded. Transocean gave up 74 cents, or 5.7 percent, to $12.26 while Ensco lost $1.08, or 7 percent, to $14.31 and Diamond Offshore Drilling dipped 70 cents, or 3.3 percent, to$20.47.
Wholesale gasoline rose 1.3 cents to $1.275 a gallon and heating oil inched up to $1.107 a gallon.
Metals prices also rose Friday. The price of gold edged up $15.40, or 1.5 percent, to $1,065 per ounce and silver added 39.3 cents, or 2.9 percent, to $14.096 an ounce. Copper rose 6.9 cents, or 3.4 percent, to $2.113 a pound.
U.S. government bond prices rose. The yield on 10-year Treasury note fell to 2.21 percent from 2.23 percent. The euro rose to $1.0863 from $1.0805. The dollar dipped to 121.25 yen from 122.85 yen. The dollar had climbed Thursday and is expected to gain strength as the Fed raises interest rates while central banks in Europe and Japan reduce interest rates.