Published: Sun, August 18, 2019
Markets | By Otis Pena

Stock market gyrates as the economic picture gets blurred

Stock market gyrates as the economic picture gets blurred

Even after the slide in yields eased Thursday, the USA bond market continued to show concern; yields ended broadly lower. That helped lift banks because higher bond yields tend to push interest rates on loans higher, which means more profits for banks. However, while the Dow Jones closed lower by over 900 points as the recession warnings grow louder, the brief inversion seen yesterday had been a long time coming with the move seen as more symbolic as opposed to significantly altering the economic outlook.

Microsoft rose 1.6 percent and Apple rose 2.2 percent. The Nasdaq rose 0.3% to 7,794. Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co, Goldman Sachs, Wells Fargo & Co and Morgan Stanley were all down between 1.5% and 2.4%. The Nasdaq Composite gained 61.74 points, or 0.79 per cent, to 7,828.35 at the opening bell.

Long-term bond yields also climbed Friday.

In another sign that investors remain jittery, however, prices for safe-play assets like government bonds and utilities also rose. The 10-year yield dropped below the yield on the two-year Treasury, a rare occurrence and one that has historically suggested a recession may be a year or two away.

Stocks ended another roller-coaster day mostly higher on Wall Street, making up just a fraction of the ground they lost in a huge plunge the day before. The yield on 10-year Treasury rose to 1.56% from 1.52%.

The S&P 500 rose 11 points, or 0.4%, to 2,851.

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General Electric rebounded 6.7% after reporting late Thursday that its CEO had bought 250,000 shares of GE stock.

Wall Street suffered a brutal morning Wednesday after the yield on the 10-year Treasury note briefly dipped below the yield of the 2-year note - the first time it's done so since 2005.

Cisco Systems jumped 2% Friday, a day after taking a nosedive on a weak forecast.

The early gains trimmed some of the week's losses, but the S&P 500 is still poised to shed 1% for the week and is on track to lose 3% for August. Kellogg added 3.2% and Procter & Gamble rose 1.4%.

Stocks turned volatile this week because of new worries that the global economy is cooling off.

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