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* Stocks erase gains from comments from Fed's Williams
* Utilities, materials lead; tech, communication serviceslag
* Nike jumps after results top estimates
* Indexes drop: Dow 1.19 pct, S&P 1.40 pct, Nasdaq 2.37 pct (Updates to late afternoon, changes byline, adds NEW YORK todateline)
By April Joyner
NEW YORK, Dec 21 (Reuters) - Wall Street stocks fell involatile trading on Friday, with the Nasdaq on pace to confirmit is in a bear market, as concerns of slowing economic growthled investors to flee stocks in high-valuation sectors such astechnology and communication services.
The tech-heavy Nasdaq sank to a 15-month low, falling asmuch as 21.5 percent from its Aug. 29 high. The benchmark S&P500 index, already on pace for its biggest percentage decline inDecember since the Great Depression, hit its lowest level sinceAugust 2017. The Dow Industrials fell to the lowest level sinceOctober 2017.
All three indexes swung between losses and gains of morethan 1 percent. They received a momentary boost after New YorkFed President John Williams said on CNBC that the Fed is open toreassessing its views and monitoring market signals thateconomic growth could fall short of expectations. urn:newsml:reuters.com:*:nN9N1LO013
But those gains soon evaporated as economic worries againprevailed. Williams' dovish comments could point to hiddenconcerns among some Fed policymakers, said Tim Ghriskey,investment strategist at Inverness Counsel in New York.
"(Williams' comments) helped the markets for a while earlyon, and then it was just a sell-off after that," Ghriskey said."Part of that is when the Fed says something like they'rere-looking at things, there's a concern that maybe the Fed knowssomething that we don't know."
Technology .SPLRCT and communication services .SPLRCL stocks bore the brunt of the sell-off, falling 2.3 percent and2.7 percent, respectively.
The FAANG group of momentum stocks fared poorly. FacebookInc FB.O shares tumbled 5.4 percent, Amazon.com Inc sharesslid 4.8 percent and Netflix IncNFLX.O shares sank 5.0percent. Shares of both Apple IncAAPL.O and Google parentAlphabet Inc GOOGL.O dropped more than 2 percent. urn:newsml:reuters.com:*:nL1N1YP1YG
Turmoil in Washington injected further pessimism into U.S.stock markets. President Donald Trump said there was a very goodchance a government funding bill, which included funding for awall along Mexico border, would not pass the Senate. urn:newsml:reuters.com:*:nL1N1YQ0E8
"The market continues to react to the possibility of agovernment shutdown, fear of a domestic and global slowdown andgeneral displeasure about the direction of Fed policy," saidRyan Larson, head of U.S. equity trading at RBC Global AssetManagement in Chicago.
The Dow Jones Industrial Average .DJI fell 271.91 points,or 1.19 percent, to 22,587.69, the S&P 500 .SPX lost 34.61points, or 1.40 percent, to 2,432.81 and the Nasdaq Composite .IXIC dropped 154.57 points, or 2.37 percent, to 6,373.84.
For the second day in a row, more than 2,000 New York StockExchange and Nasdaq-listed stocks hit 52-week lows. The daybefore, nearly 3,000 stocks hit their low for the year, the mostin any one day since October 2008.
The three indexes are already in a correction, having fallenmore than 10 percent from their record closing highs. They areclose to confirming a bear market, which is marked when an indexcloses more than 20 percent below its recent closing high.
Adding to volatility was "quadruple-witching," when optionson stocks and indexes as well as futures on indexes and stocksexpire. Trading volume is often high on "quadruple-witching"days.
Among Wall Street's advancers were shares of Nike IncNKE.N , which jumped 7.5 percent after the company's quarterlyresults beat Wall Street estimates on strength in North America. urn:newsml:reuters.com:*:nL3N1YP5WE
Declining issues outnumbered advancing ones on the NYSE by a2.48-to-1 ratio; on Nasdaq, a 3.14-to-1 ratio favored decliners.
The S&P 500 posted no new 52-week highs and 115 new lows;the Nasdaq Composite recorded five new highs and 732 new lows.