Stock market slumps deepens as the Dow turns into a bear

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Growing fears of a global recession now has investors looking for safe harbors beyond Wall Street.

The latest bout of selling to open the week comes amid an extended slump for major indexes. The benchmark S&P 500 is down more than 7% in September.The Dow Jones Industrial Average became the last of the major U.S. stock indexes to fall into what’s known as a bear market Monday as the market deepened its slump amid growing fears of a global recession.

Markets in Europe closed mostly lower. The head of the European Central Bank warned that the economic outlook “is darkening” as high energy and food prices pushed up by the war in Ukraine sap consumer spending power. France, the EU’s second-biggest economy, forecast a substantial slowdown in economic growth next year.“Yields are higher, the dollar is stronger and stocks are weak,” said Willie Delwiche, investment strategist at All Star Charts.

Casino and resort operators were a bright spot following reports that the gambling center of Macao will loosen travel restrictions in November. Wynn Resorts jumped 12%. “We’re starting to have a handoff from fears about inflation and the Fed to global economic worries,” said Mark Hackett, chief of investment research at Nationwide. “We’ve reached a universal degree of pessimism.”

The yield on the 2-year Treasury, which tends to follow expectations for Federal Reserve action, rose significantly to 4.32% from 4.21% late Friday. It is trading at its highest level since 2007. The yield on the 10-year Treasury, which influences mortgage rates, jumped to 3.89% from 3.69%.

 

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