U.S stock market sinks on growing recession fears

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The United States stocks tanked around market close on Wednesday, after the bond market flashed a troubling signal about the country’s economy.

The Dow Jones Industrial Average lost more than 800 points, or over 3.0 percent, the S&P 500 plunged over 85 points, or more than 2.9 percent, and the Nasdaq fell more than 242 points, or over 3.0 percent.

The Dow gave up the entire rebound from a sell-off earlier in August and fell to a two-month low.

The yield on the benchmark 10-year Treasury note obriefly broke below the 2-year rate, an odd bond market phenomenon that has been a reliable indicator of economic recessions.

Investors, worried about the state of the economy, rushed to long-term safe haven assets, pushing the yield on the benchmark 30-year Treasury bond to a new record low on Wednesday.

Bank stocks led the declines as it gets tougher for the group to make a profit lending money in such an environment.

Bank of America and Citigroup fell 4.6% and 5.3% respectively, while J.P. Morgan dropped 4.2%.

The financials sector dipped into correction territory, down more than 10% from a recent high.

Peace PIAK