Stocks swoon; Dow loses nearly 240 points

Financial markets swooned Wednesday, with the Dow Jones industrial average closing down nearly 240 points, on disappointing economic news and a slide in airlines stocks over Ebola fears. Investors moved money into traditional havens in times of uncertainty -- bonds, gold and stocks that pay large dividends, such as utilities.

At the close on Wall Street, the Dow was down 238.19 points, or 1.40 percent, at 16,804.71. The Standard & Poor's 500 index lost 26.13 points, or 1.32 percent, to 1,946.16. The Nasdaq composite gave up 71.30 points, or 1.59 percent, to 4,422.09.

DATA UPS AND DOWNS: A closely watched index measuring U.S. manufacturing fell in September. The Institute for Supply Management's survey came in at 56.6, below the 58.5 economists had been looking for. That more than enough offset positive news from the payroll processing company ADP, which showed private employers hired 213,000 workers last month. That was slightly better than the 207,000 workers economists expected, according to FactSet.

SEEKING SAFETY: Investors moved quickly into U.S. government bonds. The yield on the 10-year Treasury note dropped to 2.40 percent from 2.49 percent late Tuesday, a big move. Gold prices closed with gains as well, up 0.20 percent to $1,216.70 an ounce.

"A lot of people thought this economic data was going to be robust, so when it was weak, everyone moved to reposition," said Tom di Galoma, head of rates and credit trading at ED&F Man Capital.

Utility stocks, which tend to be attractive to investors during times of volatility because of their higher-than-average dividends, were among the few stocks that rose Wednesday. The Dow Jones utility index, a collection of 15 utility companies, was up 0.3 percent.

EBOLA SIDE EFFECTS: News that the first case of Ebola was diagnosed in the United States reverberated through several industries. Airlines were among the hardest hit as investors feared people would be discouraged from traveling. American Airlines fell $1.09, or 3.07 percent, to close at $34.39 and Delta fell $1.25, or 3.46 percent, to close at $34.90.

Drugmakers developing potential vaccines or treatments for Ebola rose. Tekmira Pharmaceuticals gained $3.85, or 18.21 percent, to close at $24.99 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 7.14 percent, to close at $22.95.

EUROPEAN ECONOMY: Traders are gearing up for Thursday's European Central Bank policy meeting in Naples, Italy. Though no change in policy is anticipated, there will be great interest in what ECB President Mario Draghi says about possible monetary stimulus from the central bank following further weak inflation data.

CEREAL LAYOFFS. General Mills closed down 0.93 percent after the company said it would cut up to 800 jobs, the second time it's reduced its workforce in a month. The company is struggling as Americans eat fewer boxed and frozen meals. Shares fell 47 cents to $49.98.

The Minneapolis company that owns Betty Crocker and Green Giant brands said in a regulatory filing that the job cuts will take place mostly in the United States. It expects about $135 million to $160 million in restructuring charges and foresees annual cost savings of about $125 million to $150 million, starting in fiscal 2016.