By Caroline Valetkevitch
(Reuters) - U.S. stocks dropped on Thursday as oil prices slid and worries about the global economy resurfaced, dragging down the dollar against the Japanese yen and causing investors to flee riskier assets.
The S&P 500 posted its biggest daily percentage loss in six weeks.
The growth worries weighed especially on interest-rate sensitive financials <.SPSY>, strategists said, with the group down 1.9 percent and the biggest drag on the S&P 500.
"There's concern about a global slowdown," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
"I think what we're seeing is the market believes that these (global central bank) policies and discussions on negative rates have diminishing returns at this point and are creating more harm than good, more uncertainty than stability."
The Dow Jones industrial average <.DJI> closed down 174.09 points, or 0.98 percent, to 17,541.96, the S&P 500 <.SPX> lost 24.75 points, or 1.2 percent, to 2,041.91 and the Nasdaq Composite <.IXIC> dropped 72.35 points, or 1.47 percent, to 4,848.37.
The dollar fell as much as 1.6 percent against the yen > to its lowest since October 2014 on expectations the Bank of Japan was unlikely to intervene with more policy measures.
Minutes from the Fed's March meeting released on Wednesday pointed to concerns about the central bank's limited ability to tackle a global economic slowdown, reducing the odds of a rate increase before June.
Crude oil settled lower on Thursday after data showed higher weekly inventories. The S&P energy index <.SPNY> was down 0.6 percent.
Adding to investor caution, first-quarter earnings kick into high gear next week, with a 7.4-percent year-over-year decline projected for S&P 500 companies, according to Thomson Reuters data. Some strategists argue the recent sharp drop in earnings forecasts could result in more positive surprises.
Verizon Communications Inc
Volume was slightly above the short-term average. About 7.2 billion shares changed hands on U.S. exchanges, compared with the 7.1 billion daily average for the past 20 trading days, according to Thomson Reuters data.
Declining issues outnumbered advancing ones on the NYSE by 2,349 to 677, for a 3.47-to-1 ratio on the downside; on the Nasdaq, 2,063 issues fell and 751 advanced for a 2.75-to-1 ratio favoring decliners.
The S&P 500 posted 7 new 52-week highs and 1 new lows; the Nasdaq recorded 23 new highs and 23 new lows.
(Additional reporting by Abhiram Nandakumar in Bengaluru; Editing by Anil D'Silva and Nick Zieminski)
