Wall Street stocks declined on Wednesday (Mar 27) after a steep drop in U.S. bond yields led to worries about a potential recession. The yield on the 10-year US Treasury note on Wednesday fell to its lowest level since December 2017. The Dow Jones Industrial Average dipped 32.14 points (0.13 per cent) to finish at 25,625.59. The broad-based S&P 500 shed 13.09 points (0.46 per cent) ending at 2,805.37, while the tech-rich Nasdaq Composite Index fell 48.14 points (0.63 per cent) to 7,643.38.
The precipitous decline in developed-market sovereign bond yields continued to unnerve investors about the economic outlook. Yields on 10-year Treasuries hit a fresh 15-month low on Thursday in Asia and rates on benchmark German Bunds sank further below zero after European Central Bank President Mario Draghi said an accommodative stance is still needed. Traders are snapping up bonds amid a return to low long-term rates around the world as investors fret that the slowing global expansion is deteriorating further despite signs of support from central banks. Recent data showed weakness from U.S. housing to retail sales and consumer sentiment, prompting a more dovish tone from the Federal Reserve. A closely watched segment of the yield curve inverted last week -- a gauge that's served as a recession warning. Fed funds futures are now pricing in more than a quarter point of easing by the end of 2019.
U.S.-China trade talks resume, with a cabinet-level American delegation due in China. Fed official Randal Quarles will speak Friday to the Shadow Open Market Committee on Strategic Approaches to the Fed's Balance Sheet and Communications.
CURRENCY NEWS: The Japanese yen, widely viewed as a safe-haven currency, appreciated against the dollar on Thursday as financial markets gripped by fears of a sharper downturn in the global economy. the dollar was quoted at 110.50-51 yen compared with 110.68-70 yen on Wednesday. The euro, meanwhile, fetched 124.33-37 yen against 124.53-57 yen in late Wednesday afternoon trade in Tokyo.
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