US stocks take a beating over global slowdown but recover from day's lows

Fears over world economic data and concern about the spread of Ebola dragged down major US indices, threatening to wipe out 2014 gains

US stocks were down more than 1% in afternoon trading on Wednesday as economic data added to worries over the health of the world economy and concern increased about the spread of Ebola.

But each of the three major indexes were well off their lows of the session. The S&P 500 had been down more than 3% earlier in the day, while the Dow Jones Industrial Average shed a staggering 400 points at one point in the day. The Dow finally fell 173.45 points, or 1.06%, to close at 16,141.74, the S&P 500 lost 15.21 points, or 0.81%, and the Nasdaq Composite dropped 11.85 points, or 0.28%, to 4,215.32.

Still, the losses threatened to wipe out 2014 gains for the S&P 500 and Nasdaq, while the Dow industrials fell further into the red for the year.

Concern over plunging oil prices, the potential impact of global economic weakness on U.S. earnings and the spread of Ebola have rattled markets. The S&P 500 was on track for its sixth fall in eight sessions and is down roughly 8% from its Sept. 18 record closing high.

The CBOE Volatility index (VIX), Wall Street's fear index, was last up 19.9% at 27.33 after earlier hitting its highest level since November 2011.

Worries about a lethargic global economy were not helped by data that showed U.S. retail sales and producer prices fell in September, while manufacturing activity in New York slowed to its weakest pace since April. [ID:nL2N0SA0T0]

The pace and depth of the selloff have taken many investors by surprise, while others had been anticipating a pullback.

"It's normal and it's long overdue - markets can't grind higher for that long without some sort of get-back here," said Scott Armiger, portfolio manager at Christiana Trust in Greenville, Delaware.