Dow falls 400 points as recession indicator flashes red

The Dow fell 400 points Friday as a leading recession indicator stoked fear among investors.The yield on 3-month Treasuries rose above the rate on 10-...

Posted: Mar 22, 2019 12:18 PM

The Dow fell 400 points Friday as a leading recession indicator stoked fear among investors.

The yield on 3-month Treasuries rose above the rate on 10-year Treasuries for the first time since 2007 — a shift that spooked Wall Street and sent the Dow plunging. Investors have piled back into stocks after a sell-off in late 2018.

The flattening yield curve, or the difference between short- and long-term rates, has worried investors for months. A narrowing spread is typically seen as sign that long-term confidence in the economy is waning, which could signal an eventual economic contraction.

Friday's flip added to an already rough start for the Dow, which is now down about 1.5%.

The index stumbled at the opening bell on poor manufacturing data from Germany, which also spelled trouble for the country's bond market. The yield on Germany's benchmark 10-year government bond fell below zero for the first time since October 2016.

All of that news is fueling Wall Street's ongoing concerns about slowing global growth.

White House economic adviser Larry Kudlow told CNBC last year that the spread between 3-month and 10-year Treasury yields was important to watch.

"It's actually not 10s to 2s; it's 10s to 3-month Treasury bills," Kudlow said last May. He was referring to the spread between 2-month and 10-year Treasury yields, which is also closely monitored.

The Dow wasn't the only major US index to see losses Friday. The S&P 500 dropped more than 1.5% by midday. The Nasdaq was also down roughly 2%.

Michael Darda, chief economist and market strategist at MKM Partners, said in a note that investors should wait for weekly and monthly averages to show an inversion before they read it as a "powerful recession signal."

And he noted that on average, recessions occur 12 months after an inversion — not immediately.

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 118587

Reported Deaths: 3310
CountyConfirmedDeaths
Hinds8050179
DeSoto728580
Harrison549185
Jackson480088
Rankin404686
Madison386194
Lee366582
Forrest311878
Jones296684
Washington2627100
Lafayette255043
Lauderdale2546135
Lamar231940
Oktibbeha204855
Bolivar203979
Neshoba1868111
Lowndes181962
Panola172040
Leflore170688
Sunflower164349
Warren156156
Monroe153873
Pontotoc150620
Marshall148430
Lincoln143359
Pike140656
Copiah139336
Scott127029
Coahoma125837
Union125825
Yazoo123434
Simpson123149
Grenada122939
Tate121039
Itawamba117226
Leake116342
Pearl River116360
Holmes115060
Adams109445
Prentiss109220
Alcorn104512
Wayne102722
George101719
Covington98829
Marion95943
Tippah94924
Newton87227
Hancock86828
Chickasaw86727
Tallahatchie85526
Winston85221
Tishomingo82741
Attala80527
Clarke77053
Clay71022
Jasper69617
Walthall64427
Calhoun63313
Noxubee60217
Smith60216
Yalobusha56416
Montgomery55823
Lawrence54414
Claiborne53916
Tunica53717
Perry52423
Carroll50312
Stone49114
Greene48118
Humphreys45117
Amite42813
Quitman4236
Jefferson Davis42112
Webster37813
Benton36710
Wilkinson34221
Kemper33315
Sharkey28715
Jefferson27910
Franklin2513
Choctaw2096
Issaquena1074
Unassigned00

Alabama Coronavirus Cases

Confirmed Cases: 161537

Reported Deaths: 2718
CountyConfirmedDeaths
Jefferson23769383
Mobile17039318
Tuscaloosa10539141
Montgomery10435199
Madison946798
Shelby756365
Baldwin674369
Lee662465
Calhoun468962
Marshall445251
Etowah436552
Morgan426335
Houston421234
DeKalb351229
Elmore326558
St. Clair307042
Limestone295131
Walker285593
Talladega273937
Cullman260025
Lauderdale237143
Jackson221917
Autauga210331
Colbert208232
Franklin207732
Blount198825
Russell19763
Chilton190932
Dallas188127
Coffee182611
Dale180852
Covington176729
Escambia175331
Clarke138017
Chambers137047
Pike135514
Tallapoosa135387
Marion110331
Barbour10459
Marengo103522
Butler101541
Winston94313
Geneva9357
Lawrence87733
Pickens87418
Bibb85615
Randolph84316
Hale78030
Cherokee76114
Clay75812
Washington75412
Henry7286
Lowndes71728
Monroe66010
Bullock65017
Crenshaw61130
Perry5966
Fayette59413
Cleburne5779
Wilcox57112
Conecuh56513
Macon54120
Lamar5165
Sumter47721
Choctaw39412
Greene34616
Coosa2143
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