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Stocks were sideswiped by a sharp downturn in commodities on Wednesday, continuing a recent bout of volatility among energy producers and miners.

The Dow Jones industrial average closed at 12,630.03, down 130.33 points, or 1 per cent. The broader S&P 500 closed at 1,342.08, down 15.08 points or 1.1 per cent. Canada's S&P/TSX composite index closed at 13,419.74, down 222.32 points, or 1.6 per cent.

Commodities endured their most severe one-day tumble in nearly a week, after recovering some lost ground earlier this week. Crude oil fell to $98.21 (U.S.) a barrel, down $5.67. As well, gold fell to $1,501.40 an ounce, down $15.50. But the declines were widespread, with copper, coffee, wheat and silver also falling sharply.

Among energy stocks, Suncor Energy Inc. fell 3.1 per cent and Exxon Mobil Corp. fell 2.7 per cent. Among other commodity-related stocks, Alcoa Inc. fell 2.7 per cent, DuPont fell 3.2 per cent, Potash Corp. of Saskatchewan Inc. fell 3.1 per cent and Teck Resources Ltd. fell 5.5 per cent.

The Reuters/Jefferies CRB index of 19 commodities fell 3 per cent, its biggest downturn since May 5, when investors recoiled from central bank moves in Europe and India, along with tighter trading restrictions from the New York Mercantile Exchange.

The exchange was back in the news on Wednesday - though now it relates to the fact that its parent, CME Group Inc., halted trading in crude oil, heating oil, and gasoline futures after prices for gasoline declined sharply, triggering circuit breakers earlier in the day. Trading subsequently resumed.

But there is more at work here. Energy commodities fell because the U.S. Department of Energy reported that inventories for oil and gasoline were on the rise, suggesting that demand isn't as strong as prices would have suggested.

Meanwhile, the Organization for Petroleum Exporting Countries said in its monthly report that last week's five-day losing streak for the price of oil, which slid a total of nearly 15 per cent, was "inevitable" given the backdrop of a good balance between supply and demand.

As well, there are renewed concerns about coming moves by central banks after the Bank of England's governor said that inflation is "uncomfortably high" and Bloomberg News reported that officials there signalled that interest rates may rise later this year. Rising prices in Germany and China bolstered this view. Rising rates could send the U.S. dollar higher - and since most commodities are priced in U.S. dollars, they fall.

In other moves, Walt Disney Co. fell 5.4 per cent after its quarterly revenue missed expectations when they were released on Tuesday evening.

However, Intel Corp. rose 1.7 per cent and Johnson & Johnson rose 1.2 per cent.

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