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January 24. 2014 10:45PM

Stocks tumble again, Dow drops 318 points

NEW YORK (Reuters) — U.S. stocks dropped for a second day on Friday and the S&P 500 posted its worst week since June 2012 as a selloff in emerging market assets fed through to wholesale pullbacks in equities.

The S&P 500 fell 2.6 percent for the week, closing below its 50-day moving average Friday for the first time since Oct. 9, suggesting more selling may be ahead for the market that closed out 2013 with a 30-percent gain.

The day's decline was also the biggest percentage drop since June 2013 for the index, while the CBOE Volatility index rose 32 percent and registered its biggest weekly percentage gain since May 2010.

Emerging market assets were hit by worries about slowing growth in China as well as political problems in Turkey, Argentina and Ukraine.With many market participants expecting the Federal Reserve to decide next week to shave its stimulus by another $10 billion a month, investors also worried that interest rates will soon begin to rise. Fed policymakers will conclude a two-day meeting on Wednesday.Among the 10 major S&P 500 sectors, industrials fared the worst, down 3.1 percent, as General Electric Co. lost 3.4 percent to $24.95 and Boeing Co. fell 3.3 percent to $136.65.The Dow Jones industrial average fell 318.24 points or 1.96 percent, to 15,879.11, the S&P 500 lost 38.17 points or 2.09 percent, to 1,790.29 and the Nasdaq Composite dropped 90.701 points or 2.15 percent, to 4,128.173.

For the week, the Dow fell 3.5 percent and the Nasdaq fell 1.7 percent. The Dow's weekly drop was the steepest since November 2011.