Markets Get Thrashed Amid Global Fears

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Stocks dropped deep into the red Wednesday amid growing concerns over growth prospects in the U.S. and overseas.

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The Dow Jones Industrial Average (DJI) tumbled 238 points, or 1.4%, to 16804, the S&P 500 (GSPC) lost 26.1 points, or 1.32%, to 1946, and the Nasdaq Composite (IXIC) fell 71.3 points, or 1.59%, to 4422.

Wall Street has seen volatile trading in recent days, primarily driven by soft economic results in Europe and Asia. Meanwhile, traders continue to brace for the end of the Federal Reserve’s bond-buying program and its decision on when to raise interest rates.

On Wednesday, the heavy selloff was sparked by reports on manufacturing and construction spending, both of which missed expectations.

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The Institute for Supply Management said its manufacturing index for September checked in at 56.6. Economists polled by Thomson Reuters were looking for a reading of 58.5. August construction spending booked a surprise decline, falling 0.8% compared to August. Forecasts called for an increase of 0.5%.

Germany, Europe’s largest economy, logged an unexpected drop in manufacturing activity. It was the first decline for the nation in 15 months.

The latest private-sector jobs report from payroll processor ADP (ADP) came close to estimates. ADP said 213,000 jobs were added in September, compared to a prediction of 209,000.

Another catalyst for the selloff came Tuesday evening when the Centers for Disease Control and Prevention confirmed the first case of the Ebola virus in the U.S. The patient was put in isolation at a Dallas hospital, and the CDC said it expects to prevent Ebola from spreading.

Given the struggle for equities, investors flocked to government bonds as a safe haven. Yields on the benchmark 10-year Treasury note fell to about 2.41% from Tuesday’s 2.51%.

On the corporate front, General Motors (GM) climbed 1.7% after providing a financial outlook at a conference for investors and analysts. The automaker forecasted improved margins that will outpace rival Ford Motor Co. (F).

Shares of Ford were down 1.4% after the company reported September auto sales that fell year-over-year. Sales increased for GM, Toyota (TM) and Honda (HMC), although the two Japanese automakers were trading in negative territory.

Angie’s List (ANGI) soared 19% on a report that the review website hired bankers to explore a possible sale.

In commodities, West Texas Intermediate crude oil settled 43 cents lower, or 0.5%, at $90.73 a barrel, the lowest market since April 2013. Wholesale New York Harbor gasoline climbed about a penny to $2.45 a gallon.

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