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* Energy stocks hit by lower oil prices; tech down again
* S&P 500 hits lowest level since July at session low
* Insurers lead losses in financials on hurricane worries
* CPI and core CPI rise less than expected in September
* Indexes down: Dow 2.04 pct, S&P 2.04 pct, Nasdaq 1.4 pct (Adds comments, updates to late afternoon)
By Sinéad Carew
Oct 11 (Reuters) - Wall Street indexes extended their decline on Thursday as volatility spiked and investors shunned risky investments, and Nasdaq looked like it could confirm a correction.
By late afternoon the S&P was down another 2 percent after shedding 3 percent in the previous day's session and Nasdaq was down as much as 10.3 percent from its closing record high, reached on Aug. 29. If it closes at these levels, this would confirm a correction.
At its session low, the S&P fell 2.7 percent to its lowest level since early July.
The CBOE Volatility Index thrust to its highest level since mid-February.
The energy sector, pressured by a drop in oil prices, was the lead decliner while insurers were some of the biggest losers in the financial sector a day after Hurricane Michael slammed into Florida.
The technology sector, the biggest loser in Wednesday's sell-off, was down 1.4 percent on Thursday.
Before the market open, data showing a smaller-than-anticipated rise in consumer prices eased some fears of increasing inflation pressures.
"There are still short-term negatives that will continue to put pressure on the market. We got relief on one of those negatives today with the Consumer Price Index (CPI) number, which suggests the Fed will be less aggressive than the market was concerned it will be," said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas.
The data helped push U.S. Treasury yields to a one-week low, further soothing equity investors.
But investors still faced a sea of worries, including uncertainty over a U.S.-China trade war and U.S. mid-term elections on Nov. 6, on top of hawkish comments last week from U.S. Federal Reserve officials, according to Phipps who said he expected the equity market to fall further before advancing.
The Dow Jones Industrial Average fell 521.91 points, or 2.04 percent, to 25,076.83, the S&P 500 lost 56.76 points, or 2.04 percent, to 2,728.92 and the Nasdaq Composite dropped 99.86 points, or 1.35 percent, to 7,322.19.
The S&P's 11 major sectors were all in the red by late afternoon. Energy was the biggest loser with a 2.4 percent drop as oil prices hit two-week lows after an industry report showed U.S. crude inventories rose more than expected.
Declining issues outnumbered advancing ones on the NYSE by a 3.51-to-1 ratio; on Nasdaq, a 2.50-to-1 ratio favored decliners.
The S&P 500 posted no new 52-week highs and 61 new lows; the Nasdaq Composite recorded 6 new highs and 251 new lows. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta and Nick Zieminski)