This Is What's Rattling Wall Street as Recession Fears Flare

A man looks at an electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo Friday Aug. 16 2019. Asian shares were mixed Friday as turbulence continued on global markets amid ongoing worries about U.S.-China trade conflict

A man looks at an electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo Friday Aug. 16 2019. Asian shares were mixed Friday as turbulence continued on global markets amid ongoing worries about U.S.-China trade conflict

Futures fell after the statement but then reversed course after a foreign ministry spokesperson took a more conciliatory approach, saying China hopes USA can meet it halfway on trade issues-the latest evidence that investors remain preoccupied with trade-related news, along with slowing global growth and uncertainty about the Federal Reserve' interest-rate policy.

Banks, which have lost almost 8 per cent this month pressured by tumbling bond yields, were the top gainers on Friday up 2.4 per cent to log their best session since early April.

The Dow Jones Industrial Average slid 800.49 points, or 3.05 percent, at the end of trading Wednesday, while the S&P 500 shed 2.93 percent and the Nasdaq Composite dropped 3.02 percent.

Consumer spending makes up the bulk of the USA economy, and shoppers have been carrying the economy recently amid worries that businesses will pull back on their spending because of the uncertainty created by the trade war.

The yield on two-year and 10-year Treasury bonds inverted for the first time since June 2007.

The US central bank also came under renewed pressure from US President Donald Trump for not doing enough to support the world's largest economy.

Historically, such bond movements have been a reliable indicator of possible recessions, and preceded the last global downturn more than 10 years ago.

"The market is appearing to have some confidence that Germany will actually conduct some amount of fiscal stimulus while being on the brink of recession", said Yousef Abbasi, global market strategist at INTL FCStone Financial Inc in NY.

The S&P 500 bank sub-sector rose 2.51% as rate-sensitive lenders benefited from U.S. Treasury bond yields easing off their lows.

That comes on the heels of other data showing the trade war has undermined business confidence and is curtailing investment amid the uncertainty.

"No one actually knows what is next for the markets", said Fiona Cincotta, senior market analyst at City Index. Technology stocks in the S&P 500 accounted for a big share of the sectors that declined.

Consumer products makers fared better.

Besides Walmart's surge, Procter & Gamble rose 1.4 percent and Coca-Cola gained 1.7 percent. Cisco Systems fell 8.2% on a disappointing forecast for the current quarter, and General Electric dropped 4.8% after a research report alleged the struggling conglomerate has masked the depths of its problems, resulting in inaccurate and fraudulent financial filings with regulators.

In Europe, Germany's DAX sank 0.7 percent, while France's CAC 40 lost 0.3 percent.

Japan's Nikkei 225 fell 1.2 percent, and the Hang Seng in Hong Kong rose 0.8 percent.

While all major indexes in Europe rose more than 1 per cent, Britain's blue-chip FTSE 100 finished up 0.7 per cent, lagging slightly after an outage at the London Stock Exchange due to a technical glitch cut trading short by nearly two hours.

Commodity prices, which have been swinging sharply on worries that a weaker global economy will dent demand, were lower.

Benchmark U.S. crude added 62 cents to $55.09.

Wholesale gasoline fell 4 cents to $1.64 per gallon. Brent crude, the global standard, lost $1.25 to close at $58.23.

Advancing issues outnumbered declining ones on the NYSE by a 3.36-to-1 ratio; on Nasdaq, a 3.69-to-1 ratio favored advancers.

AMS, Infineon Tech and STMicroelectronics rose between 1.2 per cent and 2.1 per cent.

Gold, which has rallied when worries about the economy have grown, rose $3.70 to $1,519.60 an ounce. Silver fell 6 cents to $17.19 per ounce and copper was unchanged at $2.59 per pound.

The dollar was little changed at 106.20 Japanese yen, compared to 106.23 yen Thursday. The euro strengthened to $1.1107 from $1.1137.