Wall Street tumbles on global economic slowdown fears

By Stephen Culp NEW YORK (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

Reuters March 23, 2019 03:05:18 IST
Wall Street tumbles on global economic slowdown fears

Wall Street tumbles on global economic slowdown fears

By Stephen Culp

NEW YORK (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, fuelling fears of a global economic downturn.

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 since 2007.

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 economic growth.

"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 is imminent."

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 sell-off.

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 estimates.

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 percent.

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 cancelled 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 favoured 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)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.