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Stocks Tumble as Investors Trade Fears Return

Dow Jones Industrial Average dropped more than 600 points Tuesday and bond yields fell, as investors' doubts about the trade…

Dow Jones Industrial Average dropped more than 600 points Tuesday and bond yields fell, as investors’ doubts about the trade union board struck between the US and China renewed concern about economic growth.

Investors largely went from stock, with industrial stalwarts like Boeing and Caterpillar suffering steep losses. Apple and other technology companies also threw, leaving Nasdaq Composite back more than 10% during its high August.

Declining enthusiasm for 90-day violent breakthroughs over the weekend drove losses, says several investors, and argues that the current gap between the world’s two largest economies could tear down economic growth in the United States and put further pressure on Europe and already in Asia.

These growth fruit driven investors in assets that tend to be safer value stores during periods of economic instability, including US government bonds and participations in electricity companies, which usually pay large dividends. [1

9659004] The move from equities to bonds sent several warning signs with an economic slowdown that recalculated through the markets.

Rising bond prices dampened the gap between the two and ten-year US government bonds to their slightest difference since 2007, careful investor surveillance, as such events tend to be preceded by a recession. The interspaces between two- and five-year interest rates and three- and five-year interest rates have already inverted.

Another warning signal: a steep return in transport stocks, as some analysts say is a bearish indicator for more volatility in the future. Dow Jones vehicles dropped by 5.2 percent, as the 20-share index for truckers, airline and railways fell more than its blue chip equivalent, indicating that the blue chip index will fight to hit a new high.

“We get early signs of a possible recession,” says Matt Peden, Managing Director of GuideStone Capital Management, which manages $ 13.2 billion in assets. “Investors are concerned about economic growth coupled with higher interest rates,” while the market seizes “less clarity” about what the United States and China agreed on last weekend.

 Commuters leave a train on a Wall Street subway station near the New York Stock Exchange earlier this year.

Commuters leave a train on a Wall Street subway station near the New York Stock Exchange earlier this year.


Photo:

Michael Nagle / Bloomberg News

The management company’s customers have sold their shares and moved the excess money to more conservative investments, such as bonds and some liquid alternative funds, said Peden.

Investors also raise money, according to Peden, strategists at

Wells Fargo

and other money managers.

The Dow industry was recently down 640 points, or 2.5% to 25183 after falling more than 800 points at its lowest point in the session. The S & P 500 also fell 2.5%, while the technically heavy Nasdaq Composite hit almost 3%.

As the year approaches its proximity, analysts grow more keen on the prospects for 2019. Bank of America Merrill Lynch said in a report Tuesday that it expects the “bear market” to continue next year with asset prices falling low in the first half.

Tuesday’s selloff collected steam the day was on. Shares would be opened lower as investors interpreted mixed messages from the US and China, for example, if Beijing had agreed to reduce and remove tariffs on US cars and President Trump’s appointment of US trade representative Robert Lighthizer, a Chinese hairpocket, as leading negotiator with Beijing .

Mr. Trump said on Twitter on Tuesday that negotiations have already begun deciding whether “a real deal with China is actually possible”. But he added that if talks fall, he is a “taxman”. Dow industrials, who had already fought, doubled after the two tweets, falling more than 200 points.

Among the stocks, Boeing fell 3%, equivalent to more than 70 points in Dow’s tumble, as the space giant shares were vulnerable to ongoing trade tensions. Caterpillar, which has also swung a lot on trade headlines, hit 4.8%.

Apple shares dropped 3.9% to erase the iPhone manufacturer’s profits in the last two days.

The bank stock was also hit hard when investors’ concerns about a recession grew, and KBW’s bank index of major US lenders decreased more than 4% in recent trade.

Meanwhile, in

FedEx

and

United Parcel Service

exacerbated the decline among transport stocks

Morgan Stanley

warned companies are likely to face challenges like

Amazon.com

builds an air network to deliver packages. The shares in both companies were below 6%.

At the same time, US government bond yields, moving in the opposite direction to prices, further decreased, as investors were concerned about the pace of US growth. The return on the reference 10-year US government bond note fell to 2,926%, according to Tradeweb, from 2,990% a day earlier.

Outside the United States, also distorted losses, as a recovery among European technology stocks contributed to a 0.8% decline in Stoxx Europe 600.

Japan’s Nikkei fell 2.4% to catch a seven-winning line . However, Shanghai Composite increased by 0.4%, while Hong Kong’s Hang Seng increased by 0.3%, which extended both indexes’ earnings to three straight sessions.

Write to Michael Wursthorn at [email protected] and David Hodari at [email protected]

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