Dow sinks 799 points on bond and trade fears
U.S. stocks plunged on Tuesday with selling accelerating into the closing bell as investors reacted to falling bond yields, rising fears of a recession and ongoing skepticism about the U.S.-China trade truce.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SP500 | S&P 500 | 5969.34 | +20.63 | +0.35% |
| I:DJI | DOW JONES AVERAGES | 44296.51 | +426.16 | +0.97% |
| I:COMP | NASDAQ COMPOSITE INDEX | 19003.651134 | +31.23 | +0.16% |
The broader market averages lost over 3 percent apiece with the Dow Jones Industrial Average closing just shy of an 800 point drop. Total trading volume, which includes all the major U.S. exchanges, averaged near 8.9 billion shares changing hands, above the average 6.9 billion.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JPM | JPMORGAN CHASE & CO. | 248.55 | +3.79 | +1.55% |
| C | CITIGROUP INC. | 69.82 | +0.88 | +1.28% |
| BAC | BANK OF AMERICA CORP. | 46.99 | +0.55 | +1.17% |
| WFC | WELLS FARGO & CO. | 75.96 | +1.13 | +1.51% |
| XLF | FINANCIAL SELECT SECTOR SPDR ETF | 50.73 | +0.55 | +1.10% |
| KRE | SPDR® S&P® REGIONAL BANKING ETF - USD DIS | 67.78 | +1.66 | +2.51% |
Financial stocks were the worst performing group in the S&P 500, led by shares of JPMorgan, Citigroup, Bank of America and Wells Fargo. Regional banks, a snapshot of domestic economies, also fell in concert with the larger banks.
The yield on the benchmark 10-year treasury fell to 2.915 percent, the lowest level since September, a sign to some investors that the U.S. economy may be on the cusp of slowing. This followed trading action between the 3-year and 5-year Treasury yields which inverted on Monday for the first time since 2007. The inversion has been a past accurate predictor of recessions.
U.S. Treasury Secretary Steven Mnuchin downplayed the concerns within the financial markets early Tuesday. “I’ve never believed that markets are efficient,” he said to FOX Business’ Maria BartiromoOpens a New Window. on Tuesday. “Markets move too far in both directions. It is important to take this information in, but I don’t see the market being an indicator as the future of the economy.”
Trade resurfaced as a major headwind. Investors also got cold feet on the U.S.-China trade truce despite President Trump’s top advisors, including Peter Navarro, touting the talks as being progress. “The president of China and the United States have a very warm and constructive exchange we’ve set off with a clear path over the next 90 days to deal substantively with structural issues and market access issues and I think people should be very optimistic about the possibilities here,” Navarro said during an interview with FOX Business.
Industrial stocks including Caterpillar and 3M weighed as the Dow’s worst performers. Boeing also fell.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CAT | CATERPILLAR INC. | 397.47 | +7.75 | +1.99% |
| MMM | 3M CO. | 128.42 | +1.10 | +0.86% |
| BA | THE BOEING CO. | 149.27 | +5.87 | +4.09% |
As for commodities, the weakness spilled over to the oil market with U.S. crude prices settling lower around $52 per barrel.
Investors will take a breather tomorrow with U.S. stock markets closed along with many government offices and businesses to observe former President George H.W. Bush's state funeral. The New York Stock Exchange, a symbol of capitalism, historically closes to observe the passing of a U.S. President but it has also been forced to issue rare closures due to other events.
Suzanne O'Halloran is Managing Editor of FOXBusiness.com and is a graduate of Boston College. Follow her on Twitter @suzohalloran