Financial markets got off to a rough start in October as disappointing economic news and Ebola fears drove stocks lower.
The Dow Jones industrial average slumped more than 200 points Wednesday, the first day of trading in a month known for big market swings. Nervous investors shifted their money to havens like bonds and gold.
At first U.S. stocks were driven lower by word that German manufacturing had slowed last month. The selling accelerated after a separate survey indicated U.S. manufacturing slowed as well.
Investors also were skittish following news that the first case of Ebola had been diagnosed in the U.S. They dumped airlines on concerns that travel will decline and bought a handful of drug companies working on experimental treatments for the deadly disease.
The blue chip Dow index lost 238.19 points, or 1.4 percent, to 16,804.71. The Standard & Poor’s 500 index lost 26.13 points, or 1.3 percent, to 1,946.16 and the Nasdaq composite lost 71.30 points, or 1.6 percent, to 4,422.09.
The declines follow a weak performance in September, just the third monthly loss for the stock market this year. Geopolitical worries, a weakening European economy and the prospect of higher interest rates have weighed on stocks, even though corporate earnings and the economic outlook remain healthy in the U.S.
The report that set off most of the selling in the U.S. was the Institute for Supply Management’s monthly manufacturing survey, one of the more closely watched economic indicators that investors look for each month. The ISM index came in at 56.6, below the 58.5 economists expected.
In European markets, Germany’s DAX finished 1 percent lower, France’s CAC 40 lost 1.2 percent and the U.K.’s FTSE 100 ended down 1 percent.
Traders moved quickly into U.S. government bonds. The yield on the 10-year Treasury note dropped to 2.39 percent from 2.49 percent late Tuesday, a big move. Gold prices rose $3.90, or 0.3 percent, to $1,215.50 an ounce.
Airlines were among the hardest hit Wednesday as investors feared people would be discouraged from traveling. American Airlines fell $1.09, or 3 percent, to $34.39 and Delta fell $1.25, or 3.5 percent, to $34.90. Southwest Airlines fell $1.22, or 3.6 percent, to $32.55.
Drugmakers developing potential vaccines or treatments for Ebola rose. Tekmira Pharmaceuticals jumped $4.11, or 17 percent, to $27.85 after the company said it may start clinical trials for an Ebola drug this year. NewLink Genetics, another company looking into Ebola treatments, rose $1.53, or 7 percent, to $22.95.
In commodities, the price of oil fell to its lowest price since April 2013 on concerns that a weakening global economy could lower oil demand. Benchmark U.S. crude fell 43 cents to close at $90.73 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 51 cents to close at $94.16 on the ICE Futures exchange in London.
In other energy futures trading, wholesale gasoline rose 1.2 cents to close at $2.450 a gallon, heating oil rose 0.5 cent to close at $2.656 a gallon and natural gas fell 9.8 cents to close at $4.023 per 1,000 cubic feet.
Silver rose 20 cents to $17.26 an ounce. Copper rose three cents to $3.04 a pound.