US STOCKS-Wall St drops in late selloff; energy, airlines fall
* Canadian Pacific approached CSX about merger -WSJ
* VIX at highest close since June 2012
* Dow down 1.4 pct, S&P down 1.7 pct, Nasdaq down 1.5 pct (Updates to close)
By Caroline Valetkevitch
NEW YORK, Oct 13 (Reuters) - U.S. stocks dropped more than 1 percent on Monday, with the S&P 500 closing below a key technical support level, as declines in energy and airline shares led a late-day selloff.
The S&P energy sector lost 2.9 percent, extending recent losses. It is down 7.6 percent for the last three sessions, its worst three-day slide since September 2011.
Five of the 10 S&P 500 sector indexes - industrials, telecommunications, consumer discretionary and materials - were in negative territory for the year.
The day's declines followed the S&P and Nasdaq's worst weekly percentage declines since May 2012 and concerns that the market is in for further weakness and more jolts. The CBOE Volatility index ended at 24.64, its highest close since early June 2012.
In a potential sign of more declines ahead, the S&P 500 closed below its 200-day moving average for the first time since Nov. 16, 2012. It has lost 4.8 percent in the last three sessions, its worst three-day decline since November 2011. Continuación...