Stocks plunge amid volatile session, Dow closes nearly 500 points lower

In what was a volatile session, U.S. stocks closed in the red on Wednesday, with the Dow Jones Industrial Average dropping more than 800 points over a two-day period to start the month.

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The Dow Jones Industrial Average ended Wednesday's session 492 points lower, clawing back fractionally from a 500-plus point drop. The Nasdaq and S&P 500 also were down 1.5 percent at the close.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES27024.8+237.44+0.89%
SP500S&P 5002995.68+29.53+1.00%
I:COMPNASDAQ COMPOSITE INDEX8148.705552+100.06+1.24%

The selling was sparked over concerns the U.S. economy is slowing, mirroring the pattern in Europe and other global nations.

Oil stocks were a drag on the broader market after the Energy Department reported an inventory build of 3.1 million barrels, almost double the estimate, stoking fears of a slowdown and driving energy stocks lower.

TickerSecurityLastChangeChange %
USOUNITED STATES OIL FUND L.P.11.06-0.12-1.07%
XOMEXXON MOBIL CORPORATION69.42+0.24+0.35%
CVXCHEVRON CORP.116.31+0.13+0.11%

The latest read on America's job market also signaled a pullback. Private-sector employers added 135,000 jobs in August, according to the latest ADP National Employment Report, missing the 140,000 that economists surveyed by Refinitiv were expecting. On Friday, the government will release employment data for the month of September. Initial concerns were sparked on Tuesday, when the ISM September Manufacturing Index fell to 47.8, its weakest reading since June 2009. Construction spending also was little changed in August.

As for sectors, financials took a beating for a second day.

Brokerage firms remained under pressure after TD Ameritrade on Tuesday evening said it would match Charles Schwab's commission-free trading. Schwab earlier on Tuesday said it would eliminate its $4.95 per trade fee on stock, exchange-traded funds and options trades.

TickerSecurityLastChangeChange %
AMTDTD AMERITRADE HOLDING36.42+0.93+2.62%
SCHWCHARLES SCHWAB39.74+2.02+5.36%
ETFCE*TRADE GROUP (E*TRADE BANK AG)39.85+0.53+1.33%

Sanofi shares were lower after Walmart suspended sales of its drug Zantac and all forms of heartburn medication containing ranitidine after the Food and Drug Administration warned of potential cancer risks.

TickerSecurityLastChangeChange %
SNYSANOFI S.A.45.56+0.67+1.49%
WMTWALMART INC.119.53+0.36+0.30%

On the earnings front, Lennar gained after reporting better than expected third-quarter profits and sales while United Foods was sharply lower after reporting its first annual loss in more than a decade. Johnson and Johnson was the Dow's only bright spot rising over 2 percent after the drugmaker announced a settlement with two Ohio counties ahead of an upcoming opioid trial.

TickerSecurityLastChangeChange %
LENLENNAR59.73+0.75+1.27%
UNFIUNITED NATURAL FOODS7.07-0.02-0.28%
JNJJOHNSON & JOHNSON132.84+2.12+1.62%

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European markets were sharply lower. London's FTSE fell 2 percent, Germany's DAX is down 1.3 percent and France's CAC is down 1.6 percent.

In Asia, Japan's Nikkei closed down 0.5 percent and Hong Kong's Hang Seng slid 0.3 percent. Markets in mainland China were closed for National Day holidays. They reopen on Oct. 8.

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FOX Business' Ken Martin and the Associated Press contributed to this article.