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The Standard & Poor’s 500 Index fell into a correction for the first time since 2011 in one of the most volatile trading days ever, as a rout in global equity markets deepened.

It was a day of wild swings as equities plunged at the open before staging a sharp rebound, with the Nasdaq 100 Index by midday nearly erasing a 9.8 percent drop. The Dow Jones Industrial Average dropped 1,000 points in the opening minutes of trading, while the S&P 500 tumbled 5.3 percent and then pared declines before an afternoon wave of renewed selling.

The S&P 500 dropped 3.9 percent to 1,893.21 at 4 p.m. in New York, and closed 11 percent below its May record. The Dow lost 588.40 points, or 3.6 percent, to 15,871.35, after sliding as much as 6.6 percent. The Nasdaq Composite Index retreated 3.8 percent to its lowest level since Oct. 27, trimming an early 8.8 percent skid.

“Investors in China have lost confidence in the central bank, and it’s a very alarming and difficult situation for the markets,” said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $110 billion. “It ultimately depends on whether the China situation results in a severe economic slowdown. It that happens, it’s going to ripple through the U.S.”

About 14 billion shares traded hands on U.S. exchanges, the most in more than four years. It was the second-highest value traded ever, according to Ana Avramovic, a U.S. strategist at Credit Suisse Group AG.

The Chicago Board Options Exchange Volatility Index rose 45 percent to 40.74, after an early 90 percent surge that temporarily sent the index to its loftiest level since January

2009. The gauge known as the VIX closed at a nearly four-year high after more than doubling last week.

Wide Swings

The Dow’s 1,089.42-point swing from its session low to its high is the biggest one-day net point swing in the average’s history. The 7.1 percent move between Monday’s high and low is the largest since the flash crash of May 6, 2010. Both the S&P 500 and the Dow posted their largest two-day declines since December 2008.

The S&P 500’s rout sent valuations tumbling. The price-to-earnings ratio for the gauge sank to 16.76, the lowest level since the October pullback. Then, the measure bottomed just above 16.50, the cheapest since January 2014. The less-expensive shares enticed some buyers, as equities sharply trimmed their opening losses.

“As prices go lower, we see selective opportunities to buy as opposed to a provocation to become more bearish,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, the private-banking unit of KeyCorp that oversees more than $25 billion in assets. “We’re emphasizing large-caps relative to smaller ones,” and within the U.S., companies that are less export-oriented.

Fed Effects

Calm in the U.S. market shattered last week, with volatility soaring by the most on record as the Dow entered a correction and investors dumped the biggest winners of 2015. Shares succumbed to a global selloff that’s wiped more than $5 trillion off the value of equities around the world since China’s shock currency devaluation on Aug. 11.

The S&P 500 is on track for its worst August decline in 17 years. It sank the most since 2011 on Friday amid signs China’s economy is weakening, capping its single 5 percent decline of the year after spending the previous seven months locked in a trading range that had no precedent in a century of market history.

Moreover, speculation had been building all year for the Federal Reserve to raise interest rates in September for the first time since 2006, following the end of quantitative easing in 2014.

Traders are now pricing in a less than one-in-four chance the central bank will act next month, from about 48 percent just before the yuan devaluation, as the rout in equity markets has shaken confidence that the global economy will be strong enough to withstand higher U.S. rates.

1998 Resemblances

“The chickens are coming home to roost,” said Thomas Thygesen, SEB’s head of cross-asset strategy in Copenhagen. “We’ve been too hopeful that Fed tapering didn’t matter, that they could hike interest rates and we’d still have a healthy economy. Since the Fed stopped bond purchases, they’ve been choking the life out of global manufacturing and that matters most for commodities and emerging markets.”

The retreat in global stock markets bears resemblances to losses that hit equities in 1998, when financial stress from Asia to Russia sent the S&P 500 down 19 percent, only to recover in three months, said Laszlo Birinyi, the president of Birinyi Associates in Westport, Connecticut.

“I wouldn’t expect a mirror image but my point is that for all the negative things I’ve read this weekend, almost all of these have been comments by people who were bearish to begin with,” Birinyi said Monday in an interview on Bloomberg Radio. “This is a short-term painful correction but when you have a situation where the market is well aware of the issues, the market has ability to correct.”

All of the benchmark index’s main groups tumbled at least 3 percent today, with raw-materials shares approaching a two-year low while energy companies slumped to the lowest since October

2011. Citigroup Inc. and JPMorgan Chase & Co. fell at least 5.2 percent as banks retreated the most since June 2012.

Only six stocks in the S&P 500 rose, led by AGL Resources Inc. The natural-gas distributor soared 28 percent after agreeing to be acquired for $8 billion in cash by Southern Co., the third-largest U.S. utility owner. Southern slid 4.9 percent.