* Dow, S&P 500 post biggest daily percent drops since Aug 2011
* 10-year Treasury yields recede from four-year highs
* Oil prices fall (Updates with closing U.S. markets' activity)
By Caroline Valetkevitch
NEW YORK, Feb 5 (Reuters) - U.S. stocks saw the biggest one day fall in six years on Monday as investors rushed to take profits, after bond yields rose sharply last week, following an equities rally to record levels in January.
The Dow Jones Industrial Average fell nearly 1,600 points for its biggest intraday drop in history in points terms, or more than 6.0 percent, before ending down 1,175.21 points, or 4.6 percent for it's biggest one day fall since Aug. 2011.
Only last month the Dow and S&P500 index had their best monthly gains in two years with stocks reaching record levels on Jan. 26, supported by the benefit of cut in U.S. corporate taxes in December, rising earnings, and healthy global economic growth.
But with the Federal Reserve seen likely to raise short term interest rates again three or four times in 2018, bond yields have been rising, and last Friday's healthy U.S. labor market report sparked fears of rising inflation, leading to Monday's sharp bout of profit taking.
"It looks to me like a typical type of scenario when you see a single stock flash crash where you'll see bids just disappear, stop orders get kicked," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey. "The overall market could have taken a cue from some of the bigger names."
The CBoe Volatility index .VIX closed at its highest since August 2015.
Selling hit all S&P sectors, though the S&P financial index .SPSY , down 5.0 percent, was the biggest daily percentage decliner, followed by healthcare .SPSY , down 4.6 percent.
The Dow Jones Industrial Average .DJI fell 1,175.21 points, or 4.6 percent, to 24,345.75, the S&P 500 .SPX lost 113.19 points, or 4.10 percent, to 2,648.94 and the Nasdaq Composite .IXIC dropped 273.42 points, or 3.78 percent, to 6,967.53. pan-European FTSEurofirst 300 index .FTEU3 lost 1.51 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 2.96 percent. rising sharply last week, U.S. Treasury yields fell from four-year highs on Monday as the selloff in equity markets sparked demand for low risk debt.
Benchmark U.S. 10-year note yields US10YT=RR surged to 2.885 percent overnight, the highest since January 2014, following data Friday that showed hourly wages rose in January.
The 10-year notes were last up rose 38/32 in price to yield 2.7093 percent, down from 2.852 percent late on Friday. U.S. dollar rose against a basket of currencies as the U.S. bond market selloff levelled off. dollar index .DXY rose 0.45 percent, with the euro last EUR= down 0.61 percent to $1.2384.
In commodities, U.S. crude CLc1 fell 1.99 percent to $64.15 a barrel, while Brent LCOc1 fell 1.4 percent to $67.62.
Oil prices settled more than 1.0 percent lower, pressured by rising U.S. output and other factors. gold XAU= steadied at $1,334.40 an ounce.
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http://tmsnrt.rs/2egbfVh Global assets in 2018
http://tmsnrt.rs/2jvdmXl Emerging markets in 2018
http://tmsnrt.rs/2ihRugV
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