By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- U.S. stock investors turned away from
stocks on Wednesday and piled into safe havens such as Treasurys,
sending the main benchmarks sharply lower.
Broad-based declines on Wall Street were led by tech and
small-cap stocks. The Russell 2000 index (RUT) lost 1.5% and is now
in correction territory, defined as a drop of more than 10% from a
recent peak, in this case on March 4.
The Dow Jones Industrial Average(DJI) fell 238.19 points, or
1.4%, to 16,804.71 and undercut its 50-day moving average. The
blue-chip index moved by triple-digits in six out of past eight
sessions. The index is down 2.75% from its record close set Sept.
19.
Wednesday's skittishness appeared to have stemmed from upbeat
employment and manufacturing data for September, which although
points to positive momentum for the U.S. economy, continued to fuel
worries that the Federal Reserve may raise interest rates sooner
than later.
Private employers added 213,000 new jobs in September, and many
view the report as a proxy for the non-farm payrolls data due on
Friday. Manufacturing in the U.S. is still expanding, albeit
slightly slower. Both PMI and ISM indexes ticked down, however
indicated growth.
The upbeat economic data should be a positive, but ironically,
have investors fretting they may need to retool their holdings.
The S&P 500 (SPX) fell 26.13 points, or 1.3%, to 1,946.16,
with materials and industrials leading the losses. Only the
utilities sector stayed in positive territory. The Nasdaq Composite
(RIXF) shed 71.30 points, or 1.6%, to 4,422.09.
Economic data: Private-sector hiring picked up slightly in
September, marking the sixth consecutive month of above-200,000 job
gains, according to data released Wednesday. Economists will use
this data as a guide leading up to Friday's nonfarm-payrolls
report, where expectations are for a gain of 220,000 jobs.
U.S. manufacturing companies grew at slower but still rapid pace
in September, a survey of executives found. The final Markit
reading of U.S. manufacturing conditions in September fell
slightly, but still, the index is just a hair below the highest
level in more than four years. Separately, outlays for U.S.
construction projects unexpectedly fell in August, the U.S.
Commerce Department reported.
Cars and biotechs: Monthly sales reports from U.S auto makers
were mixed. Ford Motor Co. (F) September sales dropped 3% and
shares fell 1.4%. General Motors (GM.XX) sales rose 19.4%, and
shares rose 1.7%.
Tekmira Pharmaceuticals Corp. (TKMR) surged 18% after the Center
for Disease Control and Prevention confirmed the first known Ebola
case diagnosed in the U.S.
Shares of Lakeland Industries (LAKE) soared 30% amid heavy
volume, as investors made a bet on a maker of Hazmat-suit maker in
the wake of Ebola case.
But airline companies were hit, as investors feared the spread
of Ebola would deter passengers from flying. Southwest Airlines
(LUV) fell 3.6%, Delta Air Lines (DAL) fell 3.5%.
Also read: U.S. Ebola case boosts drug makers working on
treatments
Other markets: U.S. Treasurys rallied, pushing the yield to
2.39%. Oil prices(CLX4) were little changed, after a selloff on
Tuesday that pushed prices to their lowest in more than a year.
Gold prices(GCZ4) rose $3.5 to 1,215.2.
Supermarkets were under pressure on the FTSE 100 after sales
fell at Sainsbury PLC and U.K. regulators announced a probe into
Tesco PLC over its accounting practices. The Stoxx Europe 600 index
was slightly lower.
The Nikkei 225 index eased, while Hong Kong and Chinese markets
were closed for a holiday. Pro-democracy rallies spread further
across Hong Kong on Wednesday, which had some worried about the
demonstration escalating.
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