US stocks closed

The rout in emerging assets knocked the Standard & Poor's 500 Index out of its seven-month trading range and gave U.S. equities their biggest drop in 18 months amid intensifying concern that global growth is slowing.

The selloff in currencies from Kazakhstan to Thailand roiled stocks around the world, wiping out year-to-date gains in U.S. equities and sending British shares into a correction. Investors sought the safety of gold and Treasuries as the S&P 500 breached a key technical level that it's been above since March.

Investor anxiety over emerging markets is increasing as the Federal Reserve considers the timing of higher interest rates. Slower global economic growth may cause the central bank to delay a move, as minutes released yesterday showed officials are concerned about stubbornly low inflation caused in part by the commodities rout.

Selling today was heaviest in some of the bull market's biggest winners. Netflix Inc. lost 7.8 percent, while media stocks sank as Walt Disney Co. tumbled 6 percent amid an analyst downgrade. Bank of America Corp. and Citigroup Inc. slumped more than 2.5 percent to pace declines among the largest banks.

The Philadelphia Stock Exchange Semiconductor Index sank 3.8 percent to bring its drop from a June high to more than 20 percent, the common definition of a bear market. The Nasdaq Biotechnology Index extended losses from a July peak to 12 percent, meeting the definition of a correction.

The Fed minutes indicated officials saw the conditions for higher rates almost fulfilled, though the gathering took place before China's currency move on Aug. 11. Three rounds of Fed bond purchases and seven years of near-zero interest rates have helped the S&P 500 rally more than 200 percent from its bear-market low.

Data today indicated that a measure of the economic outlook for the next three to six months declined, while purchases of previously owned U.S. homes unexpectedly rose in July to the highest level since February 2007.

Futures show traders see a 34 percent probability the Fed will raise its benchmark rate at its Sept. 16-17 meeting, based on the assumption that the effective fed funds rate will average 0.375 percent after the first increase. That's down from about 50 percent before release of the Fed minutes on Wednesday.

The MSCI Emerging Markets Index slid 1.2 percent to the lowest level since 2009. Shares in Shanghai dropped 3.4 percent even as the central bank takes steps to support markets. Hong Kong's Hang Seng China Enterprises Index fell 2.3 percent toward a 10-month low.