Stocks plunge on recession, growth fears
U.S. stocks plunged at the open of the markets on Wednesday as a known predictor of a forthcoming recession has entered the mix.
Investors are also concerned about weakening economic data in Europe and Asia.
The yield curve is blaring a recession warning. The spread between the U.S. 2-year and 10-year yields on Wednesday turned negative for the first time since 2007.
Such a development has occurred ahead of each and every U.S. recession of the last 50 years, sometimes leading by as much as 24 months.
There are global market concerns as the German economy shrank by 0.1 percent in the second quarter from the previous three-month period as global trade conflicts and troubles in the auto industry weighed on Europe's largest economy.
The major European markets are trading lower.
The news was similar in Asia as China's factory output, retail spending and investment weakened in July, suggesting the world's second-largest economy faces downward pressure on growth.
China's factory output rose 4.8 percent over a year earlier, a marked decline from June's 6.3 percent. Retail sales growth slowed to 7.6 percent from the previous month's 9.8 percent.
Japan's Nikkei added nearly 1 percent, Hong Kong's Hang Seng inched up less than 0.1 percent and the Shanghai Composite edged up 0.4 percent.
U.S. stocks are pulling back from Tuesday's rally which was spurred by the Office of the U.S. Trade Representative saying it would delay the tariffs on some Chinese products, including popular consumer goods, until Dec. 15.
A few other products were removed altogether, including certain types of fish and baby seats.
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Macy's reported a 48 percent drop in quarterly profit and cut its forecast for full-year adjusted earnings on Wednesday, sending shares tumbling.
On the economic front, the Labor Department said on Wednesday import prices increased 0.2 percent last month as a rebound in the cost of petroleum products offset declines in prices for capital goods and motor vehicles.
The Associated Press contributed to this article
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