U.S. stocks open slightly higher despite recession concerns
U.S. stocks opened slightly higher on Tuesday, starting off the day in red yet then bouncing back to erase the deep losses of the previous day, although the market has still been overshadowed by concerns over a potential recession.
Shortly after the opening bell, the Dow Jones Industrial Average rose 83.10 points, or 0.32 percent, to 25,980.81. The S&P 500 rebounded 10.06 points, or 0.35 percent, to 2,893.15. The Nasdaq Composite Index increased 41.21 points, or 0.52 percent, to 7,904.63.
Trader Timothy Nick, right, works on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EDT on Monday, Aug. 12, 2019. [Photo: IC]
All the 30 blue-chip stocks in the Dow turned green on Monday morning, with shares of Apple and Caterpillar rallying over 4.3 percent and over 3.8 percent respectively, leading the gainers.
Yet all of the 11 primary S&P 500 sectors traded lower around market opening, with the financial sector down over 1.9 percent, leading the losers.
Investors have been closely following up on safe-haven assets, such as the U.S. treasury bills, gold and low-risk currencies including the Japanese yen and Swiss franc.
Yields of the U.S. long-term and short-term treasury bills all increased in the morning, with the yield of the closely-watched 10-year note inching up to over 1.69 percent. The yield of the 2-year bill rose to over 1.66 percent.
The market was dampened by a flattening inverted yield curve on Monday, with the Dow once plunged over 400 points during afternoon sessions, as an inverted curve is widely considered as a harbinger of a future economic recession.
Researchers and economists at Goldman Sachs, Bank of America and Moody's analytics all raised their estimates of a potential recession in the next 12 months over the past few days, with concerns centering on the escalation in the U.S.-initiated trade war with China.
"I'd put the odds at just over even for a recession between now and the end of 2020, assuming the presidents follows through on his tariff threats," said Mark Zandi, chief economist at Moody's Analytics, on Monday.