Update at 3:30pm:

NEW YORK (AP) – The Dow Jones Industrial Average sank 800 points after the bond market flashed a warning sign about a possible recession for the first time since 2007.

The yield on the 10-year Treasury briefly dropped below the two-year yield Wednesday, an ominous signal that has predicted past recessions.

Investors have been plowing money into long-term U.S. government bonds for months, sending yields sharply lower, as they anticipate slower economic growth.

Macy’s plunged 13% after slashing its full-year profit forecast.

The Dow Jones Industrial Average fell 800 points, or 3%, to 25,479.

The S&P 500 lost 85 points, or 2.9%, to 2,840. The Nasdaq lost 242 points, or 3%, 7,773.

Bond prices soared. The yield on the 10-year Treasury sank to 1.58% from 1.68% Tuesday, a big move.

Original story:

Stocks opened sharply lower on Wall Street following big losses in Europe after German’s economy shrank in the second quarter and as the U.S. bond market flashed a warning about a possible recession.

The Dow Jones Industrial Average was down as much as 400 points early Wednesday.

U.S. government bond prices continued to soar as investors sought safety, briefly pushing a key yield below a threshold that has correctly predicted recessions in the past.

The Dow fell 388 points, or 1.5%, to 25,894.

The S&P 500 lost 39 points, or 1.3%, to 2,887. The Nasdaq lost 1.5% to 7,894.

The situation follows a tumultuous trend on Wall Street last week, when the stock market plunged 767 points on Tuesday and continued to fluctuate, and as the ongoing trade war with China continues to cause nervousness in the U.S. and global marketplaces.

Copyright 2019. Associated Press. All Rights Reserved.

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Source:: Daily times


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Dow Drops 800 After Bonds Flash Warning

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