By Caroline Valetkevitch
NEW YORK (Reuters) - U.S. stocks fell in a broad market selloff Wednesday, led by a sharp fall in Apple shares on worries about slowing demand for its products and weaker-than-expected results from Bank of America that battered the financial sector.
Apple Inc
The CBOE Volatility index, a measure of investor anxiety, jumped 18.3 percent to 16.51. It remains well below the 20 mark, however, suggesting volatility is still considered relatively subdued.
Wednesday's losses were the week's second big sell-off, adding to views the market may be starting the pullback analysts have been speculating about for months. The market has had strong gains since the start of year, yet on Monday, the S&P 500 posted its worst day since November 7 following a sharp drop in gold prices.
"After Monday's gold selloff spooked U.S. equities, it seems as though the dip buyers are a bit less aggressive, allowing the market to fall a bit more," said Gordon Charlop, a managing director at Rosenblatt Securities in New York.
"This could also be indicative of a muted risk tolerance and perhaps mark the beginning of a long-awaited equity pullback."
The Dow Jones industrial average was down 138.19 points, or 0.94 percent, at 14,618.59. The Standard & Poor's 500 Index was down 22.56 points, or 1.43 percent, at 1,552.01. The Nasdaq Composite Index was down 59.96 points, or 1.84 percent, at 3,204.67.
Financial stocks also fell after Bank of America Corp
The S&P financial index was down 1.9 percent.
Besides financials and technology, energy and materials sectors fell sharply along with oil and copper prices. The S&P 500 energy companies fell 1.9 percent and shares of Chevron
As Apple shares moved lower, the stock's implied volatility shot higher, reflecting more risk for the stock in the next 30 days.
"This continues a trend since December 2012 where the risk paradigm in Apple has changed and what was once the most valuable company in the world has seen half of its capitalization disappear in the last seven months," said said Ophir Gottlieb, managing director of San-Francisco-based options analytics Livevol.
Among other tech decliners, Texas Instruments
S&P 500 earnings are now expected to have risen 1.7 percent in the first quarter, based on actual results from 42 companies and estimates for the rest, according to Thomson Reuters data. That expectation is up from a previous estimate of 1.5 percent growth at the start of the month. At the start of the year analysts saw earnings growing 4.3 percent.
Adding to uncertainty in the market, authorities said a letter sent to President Barack Obama and intercepted at a mail screening facility contained the deadly poison ricin, according to preliminary testing.
"The ongoing sequence of these terrorist incidents ... doesn't create an environment for good investor psychology," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
(Additional reporting by Doris Frankel; Editing by Kenneth Barry and Nick Zieminski)
