Dow closes down 358 points as oil slides

Wall Street logged a third straight day of losses Thursday -- the Dow tanking 358, its biggest point plunge since Nov. 9, 2011 -- as investors grappled with fresh questions about the timing of the Federal Reserve's first interest rate hike, slowing global growth and continuing volatility in oil prices that puts U.S. crude in danger of falling below the key $40 a barrel mark.

When the closing bell rang, the Dow sat below 17,000 for the first time since Oct. 29.

The Dow Jones industrial average ended down 2.1% to 16,990.82, following a 163-point drop Wednesday.

The Standard & Poor's 500-stock index also cratered 2.1%, ending at 2035.73 and turning negative for the calendar year. The Nasdaq composite tumbled 2.8% to 4877.49. An analyst downgrade of Dow component Walt Disney also was weighing on the Dow. Disney (DIS) shares ended down an even 6% to $100.06.

Thursday's selloff pushed the Dow more than 1,300 points below its all May 19 all-time closing high of 18,312.39 and nudged the broad S&P 500 below its long-term trend line known as the 200-day moving average. All 10 major sectors of the S&P 500 were in the red.

Heading into the session the Dow was down 2.7% in 2015, while the S&P 500 was up 1% and the Nasdaq was 6% higher.

The weakness on Wall Street follows stock declines around the globe. Shares in Asian markets finished in the red, with Japan's Nikkei 225 falling 0.9%, the Hang Seng index in Hong Hong off 1.8% and the Shanghai composite in mainland China down 3.4%.

European markets were also under pressure, with Germany's DAX off 2.3% and the CAC 40 in Paris off 2.1%.

Fear is starting to rise in the market due to the losses and negative feel of the market. A closely watched Wall Street "fear gauge," dubbed the VIX, is up nearly 20% today to a level of 18.19, its highest level since July 9, but still well below its 52-week peak of 31.06 back on Oct. 15.

Dragging down sentiment was many of the same worries that have been worrying investors since last week:

• Interest rate uncertainty in the U.S. was not resolved yesterday by the release of the minutes of the Fed's July meeting, as the nation's central bank said conditions for a rate hike have yet to be achieved, raising fresh questions as to whether the Fed would hike rates for the first time in nearly a decade at its September meeting. The Fed also raised concerns about the fallout from China's lagging economy and persistent low inflation.

• Rout in oil market. A barrel of U.S. based crude is flirting with falling below the $40 per barrel mark for the first time since early 2009, which marks a fresh 6 1/2-year low. In Thursday trading, West Texas Intermediate crude fell within 21 cents of $40 per barrel, but rebounded in later trading and was up 15 cents to $40.95. Crude is being pressured by data showing a bigger weekly inventory build in the U.S., continued oversupply and concerns about slowing growth in China.

"The trend (for oil) remains bearish," Sam Stovall, U.S. equity strategist at S&P Capital IQ, warned in a research report.

• China angst. The main risk facing markets continues to be China and signs that its economy -- the world's second biggest -- is slowing faster than previously thought. Markets are also still grappling with the fallout of Beijing's surprise decision last week to devalue its currency, a move that has created turmoil in markets, especially emerging markets that do a lot of business with China. "China is causing some angst," says Michael Farr, president of money-management firm Farr, Miller & Washington. "People may (also) be worried about the continued bludgeoning of the energy complex."

"Investors are increasingly concerned about global growth being undermined by China's decelerating economy," Mark Luschini, chief investment strategist at Janney Montgomery Scott told USA TODAY.