Wall St slides as recession fears grow
NEW YORK: Wall Street main indexes slid 1.5 percent yesterday, as a closely watched US bond market indicator pointed to a renewed risk of recession following poor economic data. Yields on the two-year Treasury notes rose above the 10-year yield for the first time since 2007, a metric widely viewed as a classic recession signal.
The interest-rate sensitive bank index slipped 2.50 percent and the broader financial sector fell 1.95 percent in response. Slumping exports sent Germany’s economy into reverse in the second quarter.
The downbeat mood followed a rally in Wall Street’s main indexes on Tuesday thanks to the Trump administration’s decision to delay tariffs on some imports. “It’s almost as if global investors either don’t buy the tariff delay as a sign of real progress in the trade war or have been too consumed by further evidence of global economic weakness to care,” BMO Capital Markets strategist Stephen Gallo said.
At 9:52 am ET, the Dow Jones Industrial Average was down 406.73 points, or 1.55 percent, at 25,873.18, the S&P 500 was down 44.61 points, or 1.52 percent, at 2,881.71. The Nasdaq Composite was down 140.86 points, or 1.76 percent, at 7,875.50. The high-growth technology sector was the hardest hit. Shares of Apple Inc were down 1.74 percent after boosting markets a day earlier with a 4 percent rise. Declining issues outnumbered advancers for a 5.40-to-1 ratio on the NYSE and for a 5.99-to-1 ratio on the Nasdaq.
Meanwhile, London’s FTSE 100 tumbled to its lowest in more than two months yesterday after the yield curve on US and UK government bonds inverted for the first time since the global financial crisis, fuelling fears of a possible recession ahead. The FTSE 100 index, which was already lower because of weak economic data, dropped 1.4 percent by 1326 GMT with losses across all sectors. The midcap index slipped 1.1 percent. — Reuters