U.S. stocks open lower amid recession fears
U.S. stocks opened sharply lower on Wednesday, wiping out all gains of the previous day, as investor sentiment has been soured by broad fears of a potential recession.
Shortly after the opening bell, the Dow Jones Industrial Average declined 370.44 points, or 1.41 percent, to 25,909.47. The S&P 500 fell 39.30 points, or 1.34 percent, to 2,887.02. The Nasdaq Composite Index decreased 125.38 points, or 1.56 percent, to 7,890.98.
Traders and financial professionals work ahead of the closing bell on the floor of the New York Stock Exchange (NYSE) in New York City. [File photo: VCG]
Shares of Macy's plunged over 17.3 percent, after the U.S. department store chain reported second-quarter earnings below market estimates. The retailer also cut back its profit outlook for the full year by 20 cents.
Ten of the 11 primary S&P 500 sectors traded lower in morning sessions, with the energy sector down nearly 2.7 percent, leading the losers.
Investors have turned on a risk-off mode amid roller-coaster rides of the three major indexes in recent days, resorting to safe-haven assets, such as the U.S. treasury bills, gold and low-risk currencies including the Japanese yen and Swiss franc.
The bond market flashed worrying signals on Wednesday morning, as market jitters drove the 30-year treasury bill yield to hit a record low of a bit over 2 percent, triggering panic that a global economic recession would be in store.
Yields of the U.S. long-term and short-term treasury bills all pulled back in the morning, with the yield of the closely-watched 10-year note edging down to around 1.6 percent.
The yield of the 2-year bill also slid to nearly 1.6 percent, narrowing the gap between the spread of two yields and increasing the risk of an inverted yield curve, which is widely considered as a harbinger of a future economic recession.