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Wall Street tumbles on Ebola fears; small caps drop

US stocks dropped more than 1 percent today as the first diagnosis of Ebola in a patient in the United States spooked investors, economic data pointed to uneven growth, and the Russell 2000 index entered correction territory.

The Ebola news pressured shares of airlines and other transportation names, with the NYSE ARCA Airline index falling 3.1 percent, the biggest percentage decline since January. The Dow Jones transportation average dropped 2.5 percent, its biggest daily percentage drop since February.

Small-cap stocks extended recent losses and the Russell 2000 closed more than 10 percent below its closing high of 1,208.65 in early March, which puts the index in correction territory. It was down 1.5 percent on the day.

The latest decline was the S&P 500's third in a row and followed signs of an uneven expansion in the US economy. Growth in US factory activity slowed more than expected in September even as hiring in the private sector accelerated.

The CBOE Volatility index, Wall Street's fear gauge, ended up 2.5 percent.

The day's losses were broad, with all of the 10 S&P 500 sector ending in the red except for utilities.

The Dow Jones industrial average fell 238.19 points, or 1.4 percent, to 16,804.71, the S&P 500 lost 26.13 points, or 1.32 percent, to 1,946.16 and the Nasdaq Composite dropped 71.31 points, or 1.59 percent, to 4,422.09.

About 8 billion shares changed hands on US exchanges, above the 6.3 billion average for the last five sessions, according to data from BATS Global Markets.

The largest percentage gainer on the New York Stock Exchange was China Green Agriculture, which rose 13.64 percent to $2.25, while the largest percentage decliner was Centrus Energy , which fell 25.27 percent to $7.63.

Among the most active stocks on the NYSE were Brazil's Petrobras, down 6.27 percent at $13.30, and Ford Motor , down 1.35 percent at $14.59.

On the Nasdaq, Facebook, down 3.1 percent at $76.56, was among the most actively traded.

Declining issues outnumbered advancing ones on the NYSE by 2,319 to 760, for a 3.05-to-1 ratio on the downside; on the Nasdaq, 2,123 issues fell and 597 advanced for a 3.56-to-1 ratio.

The benchmark S&P 500 index posted three new 52-week highs and 22 new lows; the Nasdaq Composite recorded 16 new highs and 248 new lows.

European shares finished lower weighed down by disappointing regional manufacturing data and concerns about European earnings after retailer Sainsbury and cable maker Nexans issued sales warnings.

The pan-European FTSEurofirst 300 ended 0.9 percent lower at 1,367.55 points after German data showed manufacturing activity shrank for the first time in 15 months in September. Euro zone manufacturing growth slowed further as new orders contracted for the first time in a year.

Analysts said that subdued manufacturing activity from the region, coupled with yesterday's figures showing a slowdown in euro zone inflation, will add pressure on the European Central Bank, which meets tomorrow.

The market also came under pressure following a sharp decline in some individual shares.

French cable maker Nexans tumbled 8.9 percent after saying full-year revenue would be flat, while British retailer J Sainsbury dropped 7 percent after cutting its full-year sales target and saying its strategic review would include future dividend policy.

European share indexes have been falling over the past two weeks, dragged down by a flurry of sales and profit warnings as well as by growing concerns over the timing of the US Federal Reserve's expected interest rate hike next year.

On the positive side, Greek banks featured among the top gainers in Europe, with Piraeus rising 5.2 percent and Alpha Bank up 3.4 percent. Sources said Greece had won a concession from the European Central Bank that could help its top four lenders pass the asset quality review.

Europe's largest online fashion retailer Zalando began trading up 12 percent on its Frankfurt debut, but pared gains to trade around the offer price.

Swedish investment firm Kinnevik, Zalando's biggest shareholder with a post-IPO stake of about 32 percent, fell 9.6 percent, with traders saying that investors switched to owning Zalando stock directly rather than buying stocks in the holding company.

Meanwhile, Japan's Nikkei share average dropped to a two-week low in choppy trade as civil unrest in Hong Kong curbed risk appetite, while mixed data from the Bank Of Japan's tankan survey provided little catalysts.

After flirting with positive territory earlier, the Nikkei share average fell 0.6 percent to 16,082.25, the lowest closing level since September 18.

The broader Topix dropped 0.6 percent to 1,318.21 and the JPX-Nikkei Index 400 declined 0.7 percent to 11,976.60.

Big Japanese manufacturers were slightly more optimistic in the third quarter but service-sector sentiment worsened, a central bank survey showed, adding to signs that a solid economic pickup will remain elusive without another burst of stimulus.

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Tags:  Stocks  shares  FTSEurofirst  Nikkei  US  Dow Jones  





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