U.S. stocks closed sharply lower on Wednesday, furthering the week's losses, as the price of crude fell to a new five-year low and the Organization of Petroleum Exporting Countries cut its demand outlook for next year.
The Dow Jones Industrial Average had its worst day since Oct. 9. The index fell more than 280 points before recovering some of those losses to trade about 270 points lower.
The energy sector led declines on the S&P 500, with a fall of more than 3 percent in the hour before the close.
"OPEC saying 2015 is lower now gave oil a big chill. People are asking why is demand down, well economic activity is probably down too, so everybody is a little more cautious," said Kim Forrest, senior equity analyst at Fort Pitt Capital.
"The good news that the U.S. is seeming to grow might be offset by the rest of the world," she added.
OPEC reduced its estimate for 2015 by roughly 300,000 barrels a day, with the cartel saying the effect of the 40 percent drop in prices on supply and demand is uncertain.
After falling as low as $60.43 a barrel, Crude futures for January delivery closed down $2.88, or 4.5 percent, to $60.94 a barrel, the lowest since July 2009. The February gold contract dropped $2.60, or 0.2 percent, at $1,229.40 an ounce on the New York Mercantile Exchange.
The CBOE Volatility Index, a measure of investor uncertainty known as the VIX, spiked 23 percent to 18.39.
Toll Brothers traded lower after the home builder reported mixed quarterly results; Yum Brands fell after the operator of Taco Bell and other fast-food brands cut is profit outlook for the year for a second time; Costco Wholesale initially climbed after the warehouse-club operator posted a better-than-expected quarterly profit and GlaxoSmithKline declined after Bank of America Merrill Lynch downgraded its stock to underperform from neutral.