Stocks Sink as Volatility Spikes

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U.S. equity markets came heavy under pressure as traders locked-in 2013 gains and broadly ignored budget progress in Washington, D.C.

Today's Markets

As of 3:40 p.m. ET, the Dow Jones Industrial Average fell 124 points, or 0.77%, to 15845, the S&P 500 fell 20 points, or 1.1%, to 1783 and the Nasdaq Composite slid 54.8 points, or 1.4%, to 4006.

It's been a fairly quiet week on Wall Street, with no major economic reports out. That gave traders cover to lock-in gains from this year before the Federal Reserve's policy-setting meeting next week. Volatility, as tracked by the CBOE's VIX, surged 10% to its highest level in two months.

However, lawmakers on Capitol Hill could shake things up. Leaders in the House and Senate crafted a two-year budget deal that would stave off another government shutdown in January. The pact would need to be approved by both chambers.

Still, Peter Boockvar, chief market strategist at The Lindsey Group, said investors are somewhat numb to action in the nation's capital.

"The yawn of a response in markets to the budget deal, which still has to get passed, points to two things," he wrote in an email. "Number one, it was extremely modest and two, markets assumed we wouldn’t repeat October."

On the corporate front, MasterCard (NYSE:MA) revealed a 10-for-one stock split and boosted its dividend by 83%. Shares of the credit card processor rallied on the news.

In commodities, U.S. crude oil futures slipped 8 cents, or 0.09%, to $98.42 a barrel. Wholesale New York Harbor gasoline dipped 0.88% to $2.659 a gallon. Gold dropped $6.60, or 0.52%, to $1,254 a troy ounce.