BUSINESS Dow plunges over 460 points amid economic slowdown anxieties

BUSINESS

Dow plunges over 460 points amid economic slowdown anxieties

Xinhua

08:41, March 23, 2019

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A trader works ahead of the closing bell on the floor of the New York Stock Exchange (NYSE) on March 18, 2019 in New York City. (File photo: VCG)

New York, March 22 (Xinhua) -- US stocks suffered steep losses on Friday with the Dow slumping more than 460 points as Wall Street grappled with signs of slowing global growth.

The stocks traded on a downbeat note throughout the session. At the close, the Dow Jones Industrial Average plunged 460.19 points, or 1.77 percent, to 25,502.32. The S&P 500 decreased 54.17 points, or 1.90 percent, to 2,800.71. The Nasdaq Composite Index slid 196.29 points, or 2.50 percent, to 7,642.67.

"US equities traded lower mainly on bad news on growth in the Eurozone. The markets are often news-driven and everyone is trading following the stories," John Monaco, a trader at Wellington Shields & Co., LLC, told Xinhua.

The eurozone economy lost momentum again in March, expanding only modestly as manufacturers reported their steepest downturn for six years, said the global information provider IHS Markit on Friday.

The IHS Markit Flash Germany manufacturing PMI registered 44.7 in March, down from 47.6 in February, its lowest reading in over six-and-half years.

In France, the manufacturing index fell from 51.5 to 49.8 and the services index fell from 50.2 to 48.7, according to the IHS Markit report.

Earlier this week, the US Federal Reserve also lowered its economic growth forecast for 2019.

The renewed fears over slowing global growth were widely shared by traders.

On the bond markets, a closely watched measure of the Treasury yield curve temporary inverted on Friday, highlighting fears that a global slowdown will take a toll on the US economy.

The spread between the US three-month Treasury bill yield and the 10-year note rate turned negative, the first time since 2007, according to Refinitiv Tradeweb data.

An inverted yield curve happens when short-term rates surpass their longer-term counterparts. This is considered an important indicator of a recession coming in the near future, Mark Otto, an experienced New York Stock Exchange trader, told Xinhua.

Yield curve inversion could be a warning of possible economic recession, but it does not necessarily mean the recession is on the horizon, Otto added.

Despite Friday's steep sell-off, the US equities still posted solid gains for the year, with the S&P 500 and Nasdaq climbing 11.7 percent and 15.2 percent, respectively, while the Dow up more than 9 percent.

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