Wall St tumbles on global economic slowdown fears
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* All 3 major U.S. stock indexes have their worst day since
* U.S. Treasury yield curve inverts
* Banks post their biggest weekly percentage loss since
* Indexes drop: Dow 1.77 pct, S&P 1.90 pct, Nasdaq 2.50 pct
(Updates to market close)
By Stephen Culp
NEW YORK, March 22 (Reuters) - Wall Street stocks sold off
sharply on Friday, with all three major U.S. stock indexes
posting their biggest one-day percentage declines since Jan. 3,
as weak factory data from the United States and Europe led to an
inversion of U.S. Treasury yields, fueling fears of a global
Capping five tumultuous days of trading, the S&P 500, the
Dow and the Nasdaq were all down for the week.
A weaker-than-expected reading of U.S. factory activity in
March, along with similarly dour reports from Europe and Japan,
helped send U.S. Treasury yields into an inversion, with the
spread between yields of three-month Treasury bills
exceeding those of 10-year notes for the first time
An indication of near-term risk, and seen by many as a
potential harbinger of recession, the inverted Treasury yield
curve seemed to confirm investor fears of a global slowdown in
"To some extent, what's going on with the yield curve has
been exaggerated," said Bernard Baumohl, managing director and
chief global economist at the Economic Outlook Group in
Princeton. "I would not leap to the conclusion that an recession
But Baumohl warned against complacency.
"There are real clouds that are forming on the horizon. The
question is how dark are those clouds going to be and will they
trigger a recessionary storm."
Earlier in the week, the U.S. Federal Reserve concluded its
two-day monetary policy meeting with a statement that forecast
no additional interest rate hikes in 2019 on signs of economic
softness, a dovish shift that took the markets by surprise.
Interest rate-sensitive financial firms fell 2.8
percent, capping their worst week since the late-December
The Dow Jones Industrial Average fell 460.19 points,
or 1.77 percent, to 25,502.32, the S&P 500 lost 54.17
points, or 1.90 percent, to 2,800.71 and the Nasdaq Composite
dropped 196.29 points, or 2.5 percent, to 7,642.67.
Of the 11 major sectors in the S&P 500, all but utilities
ended the session in the red.
The CBOE Volatility Index, a gauge of investor
anxiety, jumped the most in two months.
Nike Inc shares dipped 6.6 percent after the
sportswear company's North American sales fell short of
Luxury retailer Tiffany Inc said it expected
earnings growth to resume in the second half of the year and
affirmed its fiscal 2019 targets, sending its shares up 3.1
Electric automaker Tesla Inc slid 3.5 percent
following a research note from Cowen that saw soft U.S. demand
for the Model 3 until the release of the company's lower-priced
model in the second quarter.
Boeing Co continued to fall, losing 2.8 percent as
Indonesian airline Garuda canceled a $6 billion order for the
company's 737 MAX planes, citing customer fear in the wake of
the Ethiopian Airlines crash.
Netflix Inc dropped 4.5 percent on the eve of Apple
Inc's launch of a rival streaming service on Monday.
Declining issues outnumbered advancing ones on the NYSE by a
3.69-to-1 ratio; on Nasdaq, a 4.90-to-1 ratio favored decliners.
The S&P 500 posted 54 new 52-week highs and 5 new lows; the
Nasdaq Composite recorded 25 new highs and 87 new lows.
Volume on U.S. exchanges was 8.66 billion shares, compared
to the 7.71 billion average over the last 20 trading days.
(Reporting by Stephen Culp
Editing by Susan Thomas)
First Published: 2019-03-22 13:12:20
Updated 2019-03-22 22:31:32
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