Investors Nervous With Fed Meeting Ahead and a Santa Crash Behind

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The Dow Jones industrial average closed down off 507 points, or 2.1 percent, extending a slide after a 496-point loss Friday.

The Dow is now more than 11 percent lower than its 52-week high while the S&P 500 is down 12 percent compared its record high.

Energy stocks including Exxon Mobil fell again on Tuesday, but some of those losses were offset by gains in Apple, Amazon, Microsoft and Boeing.

Monday also brought additional criticism of the Fed from Donald Trump, saying that it was "incredible" the body might even consider a rate increase.

Cryptocurrency, on the other hand, made a bit of a recovery, with bitcoin up more than 8% to about $3,539.33 and Ethereum up more than 10% to $95.09 in the past 24 hours, according to CoinMarketCap data.

A measure of small-company stocks fell into a bear market, a decline of 20 percent below their recent peak.

Bond price rose, sending yields lower.

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Bank stocks were fractionally lower on the day, with the KBW Bank Index down 0.25% as the spread between the 2- and 10-year yields held near 16 basis points.

Stock of energy companies fell across the board as oil prices sank more than 7% to a 15-month low on Tuesday. China and Europe have also suggested that growth is slowing. The FTSE 100 index of leading British shares was 1 percent higher at 6,769.

"We're facing the biggest December fall in USA stocks since 1931 and this is striking and worrying at the same time", said Chris Bailey, European strategist at worldwide financial services firm Raymond James.

"The market's overriding fear is that the Fed will press ahead with plans to raise interest rates, which could be too much for the USA economy to handle", Jasper Lawler of London Capital Group said in an email on Tuesday. The Nikkei 225 in Japan lost 1.8 percent, the Hang Seng in Hong Kong dropped 1 percent and South Korea's Kospi slipped 0.4 percent.

The S&P 500 is down 127.45 points, or 4.8 per cent.

"An indication from the Fed that they will slow their pace of hikes could calm these jittery markets", he said. USA crude prices tumbled more than 7 percent on concerns of oversupply. Higher rates can slow economic growth, and that's something investors have been worrying about as China and Europe have suggested growth is slowing, and the US economy is also expected to cool off in 2019.

USA stocks held near a 14-month low on a volatile day that saw the benchmark gauge swing nearly 2 percent from trough to peak. Brent crude, used to price global oils, was up a cent at $56.27 a barrel.