- Title: Dow posts biggest one-day drop since October as recession fears take hold
- Date: 14th August 2019
- Summary: SANTA MONICA, CALIFORNIA, UNITED STATES (AUGUST 14, 2019) (REUTERS VIA SKYPE) (SOUNDBITE) (English) GERBER KAWASAKI CEO, ROSS GERBER, SAYING: "Well the Fed can make a difference and the market's clearly saying the Fed has to lower now three times to even get the yield curve looking correctly and I think that's what the Fed has to do to keep the economy going here in the United States and also help the foreign markets. And so I don't look at that as good news that after tax reform and a really strong economy that now we're in an interest rate lessening cycle because of basically, horrible policies. So expecting the Fed to save us from really structural problems isn't really going to work that well this time, and that's what I'm concerned about."
- Embargoed: 28th August 2019 21:29
- Keywords: Wall Street the Dow largest one-day point drop since October 2018 recession U.S. Treasury yield curve temporarily inverted for the first time in 12 years
- Location: NEW YORK, NEW YORK + SANTA MONICA, CALIFORNIA, UNITED STATES / INTERNET
- City: NEW YORK, NEW YORK + SANTA MONICA, CALIFORNIA, UNITED STATES / INTERNET
- Country: USA
- Topics: Economic Events,Equities Markets
- Reuters ID: LVA005AS6Y9TZ
- Aspect Ratio: 16:9
- Story Text: Wall Street sold off sharply on Wednesday (August 14) as recession fears gripped the market after the U.S. Treasury yield curve temporarily inverted for the first time in 12 years.
All three major U.S. indexes closed down about 3%, with the blue-chip Dow posting its biggest one-day point drop since October after 2-year Treasury yields surpassed those of 10-year bonds, which is considered a classic recession signal.
Dire economic data from China and Germany suggested a faltering global economy, stricken by the increasingly belligerent U.S.-China trade war, Brexit woes and geopolitical tensions. Germany reported a contraction in second-quarter gross domestic product, and China's industrial growth in July hit a 17-year low.
Wednesday was the first time that yields for 2-year and 10-year Treasuries had inverted since June 2007, months before the onset of the great recession, which crippled markets for years. The U.S. yield curve has inverted before every recession in the past 50 years. The CBOE volatility index, a gauge of investor anxiety, jumped 4.58 points to 22.10.
The Dow Jones Industrial Average fell 800.49 points, or 3.05%, to 25,479.42, the S&P 500 lost 85.72 points, or 2.93%, to 2,840.6, and the Nasdaq Composite dropped 242.42 points, or 3.02%, to 7,773.94.
(Production: Fred Katayama / Roselle Chen)
- Copyright Holder: REUTERS
- Copyright Notice: (c) Copyright Thomson Reuters 2019. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None