By Anora Mahmudova and Barbara Kollmeyer, MarketWatch

NEW YORK (MarketWatch) -- U.S. stock investors turned away from stocks on Wednesday and piled into safe havens such as Treasurys, sending the main benchmarks sharply lower.

Broad-based declines on Wall Street were led by tech and small-cap stocks. The Russell 2000 index (RUT) lost 1.5% and is now in correction territory, defined as a drop of more than 10% from a recent peak, in this case on March 4.

The Dow Jones Industrial Average(DJI) fell 238.19 points, or 1.4%, to 16,804.71 and undercut its 50-day moving average. The blue-chip index moved by triple-digits in six out of past eight sessions. The index is down 2.75% from its record close set Sept. 19.

Wednesday's skittishness appeared to have stemmed from upbeat employment and manufacturing data for September, which although points to positive momentum for the U.S. economy, continued to fuel worries that the Federal Reserve may raise interest rates sooner than later.

Private employers added 213,000 new jobs in September, and many view the report as a proxy for the non-farm payrolls data due on Friday. Manufacturing in the U.S. is still expanding, albeit slightly slower. Both PMI and ISM indexes ticked down, however indicated growth.

The upbeat economic data should be a positive, but ironically, have investors fretting they may need to retool their holdings.

The S&P 500 (SPX) fell 26.13 points, or 1.3%, to 1,946.16, with materials and industrials leading the losses. Only the utilities sector stayed in positive territory. The Nasdaq Composite (RIXF) shed 71.30 points, or 1.6%, to 4,422.09.

Economic data: Private-sector hiring picked up slightly in September, marking the sixth consecutive month of above-200,000 job gains, according to data released Wednesday. Economists will use this data as a guide leading up to Friday's nonfarm-payrolls report, where expectations are for a gain of 220,000 jobs.

U.S. manufacturing companies grew at slower but still rapid pace in September, a survey of executives found. The final Markit reading of U.S. manufacturing conditions in September fell slightly, but still, the index is just a hair below the highest level in more than four years. Separately, outlays for U.S. construction projects unexpectedly fell in August, the U.S. Commerce Department reported.

Cars and biotechs: Monthly sales reports from U.S auto makers were mixed. Ford Motor Co. (F) September sales dropped 3% and shares fell 1.4%. General Motors (GM.XX) sales rose 19.4%, and shares rose 1.7%.

Tekmira Pharmaceuticals Corp. (TKMR) surged 18% after the Center for Disease Control and Prevention confirmed the first known Ebola case diagnosed in the U.S.

Shares of Lakeland Industries (LAKE) soared 30% amid heavy volume, as investors made a bet on a maker of Hazmat-suit maker in the wake of Ebola case.

But airline companies were hit, as investors feared the spread of Ebola would deter passengers from flying. Southwest Airlines (LUV) fell 3.6%, Delta Air Lines (DAL) fell 3.5%.

Also read: U.S. Ebola case boosts drug makers working on treatments

Other markets: U.S. Treasurys rallied, pushing the yield to 2.39%. Oil prices(CLX4) were little changed, after a selloff on Tuesday that pushed prices to their lowest in more than a year. Gold prices(GCZ4) rose $3.5 to 1,215.2.

Supermarkets were under pressure on the FTSE 100 after sales fell at Sainsbury PLC and U.K. regulators announced a probe into Tesco PLC over its accounting practices. The Stoxx Europe 600 index was slightly lower.

The Nikkei 225 index eased, while Hong Kong and Chinese markets were closed for a holiday. Pro-democracy rallies spread further across Hong Kong on Wednesday, which had some worried about the demonstration escalating.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

Ford Motor (NYSE:F)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Ford Motor Charts.
Ford Motor (NYSE:F)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Ford Motor Charts.