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 12:17 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.

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 42772

Reported Deaths: 1542
CountyConfirmedDeaths
Hennepin13697791
Ramsey5313234
Dakota275396
Stearns253619
Anoka2458111
Nobles16946
Washington130641
Olmsted130220
Mower9872
Scott8994
Rice8928
Clay62038
Kandiyohi5951
Blue Earth5862
Wright5475
Carver5002
Todd4042
Sherburne3725
Lyon3512
Freeborn3140
Watonwan2720
Steele2501
Benton2423
St. Louis23816
Nicollet20712
Martin1755
Winona15015
Cottonwood1420
Goodhue1428
Le Sueur1361
Crow Wing11512
Otter Tail1151
Pine1150
Chisago1111
McLeod1030
Dodge990
Carlton940
Polk903
Unassigned8838
Pipestone864
Isanti830
Murray830
Chippewa811
Waseca800
Itasca7612
Douglas740
Morrison691
Becker680
Meeker661
Faribault610
Jackson580
Sibley572
Beltrami550
Pennington540
Brown492
Wabasha430
Mille Lacs412
Renville373
Fillmore360
Rock350
Swift351
Grant320
Houston320
Yellow Medicine310
Roseau280
Lincoln250
Redwood250
Koochiching221
Wilkin223
Norman210
Cass202
Big Stone180
Kanabec181
Wadena180
Aitkin160
Marshall160
Clearwater150
Mahnomen131
Pope130
Stevens110
Hubbard100
Lake90
Traverse70
Lac qui Parle50
Red Lake50
Kittson20
Cook10
Lake of the Woods00

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 35534

Reported Deaths: 754
CountyConfirmedDeaths
Polk7611185
Woodbury334944
Black Hawk253459
Buena Vista173811
Johnson14878
Dallas141531
Linn141083
Marshall110019
Scott109810
Dubuque100023
Story8778
Pottawattamie84113
Wapello71631
Muscatine69545
Crawford6813
Sioux5050
Tama48829
Webster4295
Wright3991
Louisa36713
Jasper35717
Plymouth3535
Warren3371
Cerro Gordo3291
Dickinson3073
Washington2559
Hamilton2041
Boone1751
Clay1511
Clarke1453
Clinton1391
Allamakee1384
Mahaska11917
Shelby1190
Carroll1171
Bremer1167
Franklin1130
Poweshiek1128
Pocahontas1091
Des Moines1022
Emmet970
Cedar961
Henry933
Hardin920
Cherokee851
Marion840
Floyd822
Guthrie814
Taylor810
Benton781
Monona780
Jones741
Butler702
Osceola690
Sac680
Jackson670
Buchanan651
Calhoun652
Iowa631
Jefferson630
Hancock621
Harrison620
Lyon610
Humboldt601
Fayette590
Delaware581
Madison562
Lee542
Mills530
Palo Alto530
Monroe527
Clayton503
Winneshiek500
Grundy470
Mitchell470
Winnebago440
Davis431
Kossuth430
Union430
Howard370
Lucas354
Unassigned350
Chickasaw310
Greene310
Cass300
Worth270
Appanoose243
Keokuk241
Ida230
Page220
Van Buren211
Audubon181
Adair170
Ringgold161
Montgomery152
Decatur130
Fremont110
Wayne110
Adams80
Rochester
Overcast
76° wxIcon
Hi: 77° Lo: 55°
Feels Like: 76°
Mason City
Broken Clouds
84° wxIcon
Hi: 83° Lo: 60°
Feels Like: 89°
Albert Lea
Overcast
75° wxIcon
Hi: 73° Lo: 57°
Feels Like: 75°
Austin
Broken Clouds
75° wxIcon
Hi: 76° Lo: 57°
Feels Like: 75°
Charles City
Clear
84° wxIcon
Hi: 85° Lo: 61°
Feels Like: 90°
Slight Risk of Severe Storms Tuesday as a Cold Front approaches
KIMT Radar
KIMT Eye in the sky

Latest Video

Image

Dave Noon Weather 7/14

Image

Getting Back to School physicals during the Pandemic

Image

'Cradle 2 Career' hosting discussion about race

Image

Dave's Main 6:30 Weather 7-14

Image

Sean's 10pm Weather 7/13

Image

Albert Lea council considers Covid response

Image

Rochester Police Policy Conversation

Image

Training the area's best basketball stars

Image

Pandemic Positive: A decline in air pollution

Image

Sen. Smith Highlights Health Inequalities

Community Events