Heightened recession fears sent the key market indexes plunging in the stock market today, with the Dow Jones industrials suffering an 800-point loss.
XThe indexes gave up their big gains from Tuesday and then much more, as the Dow Jones Industrial Average plunged 3%, the S&P 500 tumbled 2.9% and the Nasdaq sank 3%. Small caps tracked by the Russell 2000 lost 2.9%. Preliminary data showed higher volume on the NYSE and Nasdaq vs. Tuesday's total.
Stocks gapped down at the open and fell further throughout the session as the bond market signaled an impending recession. The 10-year Treasury yield fell below the 2-year note yield, which in the past has preceded recessions. The last time the yield-curve inversion occurred was in late 2007, ahead of the Great Recession.
That sent investors scrambling for cover with few places to hide.
President Trump tweeted: "CRAZY INVERTED YIELD CURVE!" and assailed the Federal Reserve, referring to "clueless Jay Powell and the Federal Reserve. ... the Fed is holding us back."
Dow Jones Breaks Support
The Dow Jones index closed below its 200-day moving average for the first time since early June. The S&P 500 and Nasdaq held 2% and 3%, respectively, above the long-term support line.
Blue chips led the sharp decline, with four Dow stocks including JPMorgan (JPM) and Cisco Systems (CSCO) falling more than 4% apiece. Goldman Sachs (GS) also lost 4%. Both JPMorgan and Goldman fell below their 200-day lines to their lowest levels since June.
Cisco shares fell further after the close on the company's earnings report.
Chevron (CVX) and Exxon Mobil (XOM) fell about 4% each, as West Texas intermediate crude prices skidded 4.5% to $54.55 a barrel.
Energy ETFs took a drubbing. VanEck Vectors Oil Services (OIH) sank 6%, SPDR S&P Oil & Gas Exploration & Production (XOP) dropped 5%. Energy Select Sector SPDR (XLE) and iShares U.S. Energy (IYE) fell about 4% each.
Gold ETFs, however, headed north. SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) added nearly 1% as they trade at six-year highs.
Energy, department stores and other retailers were among the hardest hit industry groups in the broad sell-off. Gold miners gave up a tiny gain to close lower, while utilities also saw minimal losses.
Despite gold's relative strength, Kirkland Lake Gold (KL), the best performer in the IBD 50, edged 0.8% lower. Shares are holding well above the 50-day line and are 7% off their high.
The biggest IBD 50 loser, Wyndham Hotels & Resorts (WH), plunged 8% to a four-month low as it sliced through its 200-day line. Paylocity (PCTY) tumbled 7%, falling back below its 50-day line, while Ulta Beauty (ULTA) skidded 6% toward its 200-day line.
Trade Desk (TTD), Planet Fitness (PLNT) and Atlassian (TEAM) shed more than 4% apiece.
The Innovator IBD 50 ETF (FFTY) shed 3.4% in the stock market today.
Follow Nancy Gondo on Twitter at @IBD_NGondo
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