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

US 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 October 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. “There’s definitely some nervousness.

The world is suffering from the emerging markets’ flu,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. Emerging market assets were hit by worries about slowing growth in China as well as political problems in Turkey, Argentina and Ukraine.

With many sharemarket participants expecting the Federal Reserve to decide next week to shave its stimulus by another USD 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 USD 24.95 and Boeing Co fell 3.3 percent to USD 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 90.70 points or 2.15 percent, to 4,128.17. 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.

Argentina’s government said Friday it would relax stringent foreign-exchange controls, after it abandoned its long-standing policy of intervening to support the peso currency. That resulted in the currency’s steepest plunge since the 2002 financial crisis. Going against the day’s downdraft was Procter & Gamble Co, which advanced 1.2 percent to USD 79.18, giving the Dow its biggest boost.

The world’s largest household products maker reported lower quarterly profit, but kept its 2014 sales forecast unchanged. Volume was well above the average for the month. About 8.8 billion shares changed hands on US exchanges, compared with the average of 6.6 billion so far this month, according to data from BATS Global Markets.