Global weakness hits U.S. stocks for third straight day

Chicago’s Willis Tower megan k. rauch/MEDILL

Signs of weakness in the U.S. manufacturing economy and concerns about global growth drove the major stock indexes down Wednesday to their lowest levels since mid-August.

The Dow Jones Industrial Average fell 238.19 points, or 1.4 percent, to close at 16804.71. The S&P 500 Index lost 26.13 points, or 1.3 percent, to close at 1946.16. The Nasdaq Composite Index dropped 71.3 points, or 1.6 percent, to close at 4422.09.

Treasury securities rallied as investors fled the stock market, sending the yield on the benchmark 10-year Treasury note down to 2.40 percent compared with Tuesday’s closing yield of 2.49 percent.

Wednesday marked the third straight day of declines in stocks, as investors grow increasingly concerned about protests in Hong Kong and the possibility that uprisings could disrupt China’s economy.

Closer to home, airline stocks were among those affected by the declines, as investors grew concerned that the first reported case of Ebola in the U.S. could curtail air travel. Shares of Chicago-based United Continental Holdings, Inc., which set a 52-week high on Sept. 10, fell nearly 3 percent to $45.38.

Neal Dihora, an airline analyst at Morningstar, Inc. downplayed the impact of Ebola on the airline sector.

“The past 40 years have shown that there is a relationship between the overall health of the economy and airlines. When the economy slows down, the demand for airlines also slows down,” Dihora said.

A disappointing reading for the Institute for Supply Management Manufacturing Index for September added to investor worries about the strength of the economy.

The news was not all bad. General Motors Co. and Chrysler Group LLC. each reported  a 19 percent increase in vehicle sales in September. Both companies beat analyst expectations of 18 percent for GM and 16 percent for Chrysler.

Ford Motor Co. reported a 3 percent decline from a year ago, but the company said that several models, including the Ford Fusion and the Ford Explorer, saw increases in sales during September.