Dow dives 254, U.S. oil price around $42

Stocks tumbled Thursday as the Dow dropped 254 points and the S&P 500 fell back into the red for the year.

Investors reacted to another sharp drop in oil prices, comments from the European Central Bank that suggest more stimulus may be on the way and comments from several Federal Reserve officials offering differing views on the need for a rate hike in December.

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Department store retailer Nordstrom was pounded after its third quarter earnings, released after the closing bell, failed to meet Wall Street expectations. Company stock JWN fell 15.1% in after hours trading.

The Dow Jones industrial average ended down 254 points, or 1.4%, to 17,448 — its biggest point drop since a 313-point plunge Sept. 28. The Standard & Poor's 500 index dropped 29 points, or 1.4%, to 2046 as the broad-based index fell below its 2014 close of 2058.90.

The Nasdaq composite index fell 1.2% to 5005 but remained the only major index to stay positive for the year.

Energy shares were the biggest decliners for a second straight day as oil prices tumbled again after a government report showed crude stockpiles grew by a more-than-expected 4.2 million barrels last week. U.S. benchmark crude fell 2.7% to $41.77 a barrel and has dropped five of the last six days.

Six members of the Federal Reserve, including Fed-chair Janet Yellen, were slated to speak today. The early speeches put a spotlight on the continuing debate over where the members stand on whether or not to raise interest rates at its next policy meeting in December.

Wall Street is anxious as the Fed debates whether to hike interest rates at its December meeting for the first time in a decade. This comes at the same time that ECB chief Mario Draghi is hinting at additional stimulus measures to combat "visible" downside risks to growth in the eurozone and boost still flagging inflation.

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In a morning research report, Barclays said that investors should "curb their enthusiasm," arguing that the post-2008 financial game plan of buying stocks benefiting from "ultra-loose" monetary policy, low inflation and steady growth is giving way to a new paradigm.

"2015 was the first year when this approach showed its limitations, with lackluster returns in stocks and bonds," Barclays head of macro research Ajay Rajadhyaksha told clients in a report. "We see this as the beginning of a new trend, with two slow-moving but enormously important drivers: China and the Fed."

Also giving investors pause are fresh fears about valuations, which have climbed back into overvalued territory following the big rally off of the August lows, and ongoing concerns about the economic impact of a slowdown in China.

Global shares were also muddling through the coming shift in central bank policy, highlighted by coming tightening by the Fed and more monetary stimulus from the ECB.

In Asia, Japan's Nikkei 225 index was fractionally higher, while shares in Hong Kong's Hang Seng index surged 2.4% and stocks in mainland's China's Shanghai composite index dipped 0.5%.

In Europe, shares also fell. Germany's DAX index was off 1.1% and the CAC 40 in Paris was down 1.9%. The broader Stoxx Europe 600 was 1.5% lower.

Draghi's comments to the European Parliament on Thursday have Wall Street guessing that the ECB will consider lowering interest rates further and extending the duration of its bond-buying program.