Economic Fears Push Wall Street Into the Red
US stocks dove into negative territory, wiping out the gains for the week on all three major indices as Wall Street investors grew nervous about prospects for the global economy.
Wall Street had its second worst day of the year as a closely-watched recession indicator based on bond rates flashed red and monthly US, French and German manufacturing indices fell.
At the Heartland Forum, I talked about how Washington should work for family farmers across America—not just the agribusiness executives pocketing multi-million dollar bonuses or the Wall Street traders. pic.twitter.com/0fQjnwgRZ1
— Elizabeth Warren (@ewarren) March 30, 2019
The benchmark Dow Jones Industrial Average fell 1.8 percent, or 460 points — its worst day since January 3 — closing at 25,502.32, leaving it down 1.3 percent for the week.
The broader S&P 500 fell even further, losing 1.9 percent to settle at 2,800.71 while the tech-heavy Nasdaq sank 2.5 percent, to finish the week at 7,642.67.
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The so-called yield curve, which tracks the spread between short- and long-term rates on US Treasury bonds, briefly inverted on Friday, with yields on three month bonds falling below those for 10-year notes — the first time this had happened since before the global financial crisis in 2007.
Following the close, 10-year yields were higher at 2.436 percent, back above three-month US Treasurys, which were at 2.442 percent.
The yield curve is closely watched since it has inverted prior to all recessions in recent decades. But Justin Lederer, interest rates strategist at Cantor Fitzgerald, told AFP the flip was not cause for so much alarm. “The yield curve inversion reveals more what is going on in the global landscape, the fact that global growth is slowing down,” he said. “I don’t think it is an immediate signal that a recession is approaching.” Also weighing on the Dow were poor showings for Boeing and Nike.
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An Indonesian air carrier on Friday became the first to announce it was canceling a multi-billion-dollar order of 737 MAX aircraft in the wake of recent fatal crashes in which nearly 350 people perished.
Boeing fell 2.8 percent, extending decline since the March 10 crash of Ethiopian Airlines Flight ET302. Nike sank 6.6 percent, a day after posting disappointing sales in North America. In one bright spot, the National Association of Realtors reported US homebuyers had snapped up existing homes in February, posting the biggest increase in more than three years.
