October 1, 2014 / 1:42 PM / 3 years ago

Wall St falls on Ebola concerns; airlines tumble

Traders work on the floor of the New York Stock Exchange September 30, 2014.Brendan McDermid

NEW YORK (Reuters) - U.S. stocks were lower on Wednesday as caution rose following the first diagnosis of a patient in the United States with Ebola.

Airline stocks fell sharply on concerns the disease could curb air travel, with several numbering among the biggest decliners on the S&P 500. Delta Air Lines lost 3.5 percent to $34.90 while Southwest Airlines was off 2.8 percent at $32.83. The NYSE Arca Airline index fell 2.1 percent.

"African travel isn't a huge part of the travel industry, but it does seem like some parts of the industry are likely to be disrupted from this," said Mitch Rubin, chief investment officer at RiverPark Advisors in New York.

The news overshadowed a positive reading on the labor market, but the S&P 500 appeared to find support at its 100-day moving average, a level it has not closed below since Aug. 7.

"A global healthcare crisis is a reason to be very focused on your short-term capital needs, especially when valuations aren't hugely attractive to begin with," said Rubin, who oversees about $3.7 billion in assets.

Drug companies with Ebola treatments in their pipelines rallied in heavy trading. U.S. shares of Tekmira Pharmaceuticals jumped 17 percent to $24.91 and was the Nasdaq's most active name. Sarepta Therapeutics rose 4.8 percent to $22.11 while BioCryst Pharmaceuticals added 4.7 percent to $10.23.

All three were well off their premarket highs after Texas health officials - where the diagnosis was made - wrote on Twitter that they had no other suspected cases at this time.

Lakeland Industries Inc, which makes protective clothing for healthcare workers and first responders, rose 9.4 percent to $7.60.

In a positive reading on the economy, a report showed private employers added 213,000 jobs in September, more than expected, although August's number was revised down by 2,000 jobs. The stronger-than-expected September data could raise expectations for the closely watched non-farm payroll report released on Friday.

The Dow Jones industrial average was falling 124.2 points, or 0.73 percent, to 16,918.7, the S&P 500 was losing 14.12 points, or 0.72 percent, to 1,958.17 and the Nasdaq Composite was dropping 37.79 points, or 0.84 percent, to 4,455.60.

Declining issues were outnumbering advancing ones on the NYSE by 1,978 to 781, for a 2.53-to-1 ratio on the downside; on the Nasdaq, 1,786 issues were falling and 470 advancing for a 3.80-to-1 ratio favoring decliners.

The benchmark S&P 500 index was posting no new 52-week highs and 15 new lows; the Nasdaq Composite was recording 4 new highs and 106 new lows.

Editing by Bernadette Baum and Nick Zieminski

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