NEW YORK, Aug. 14 (Xinhua) -- U.S. stocks traded sharply lower on Wednesday, wiping out all gains of the previous day, as investor sentiment has been soured by broad fears of a potential recession.
At midday, the Dow Jones Industrial Average declined 633.25 points, or 2.41 percent, to 25,646.66. The S&P 500 fell 73.47 points, or 2.51 percent, to 2,852.85. The Nasdaq Composite Index decreased 231.62 points, or 2.89 percent, to 7,784.74.
Ten of the 11 primary S&P 500 sectors traded lower around midday, with the energy sector down nearly 3.4 percent, leading the losers.
The financial sector was also among the worst performers, retreating over 3.1 percent, as major bank shares, including Bank of America, Citigroup and JP Morgan, extended losses.
Shares of Macy's plunged over 14.2 percent, after the U.S. department store chain reported second-quarter earnings below market estimates. The retailer also cut back its profit outlook for the full year by 20 cents.
Investors have switched on a risk-off mode amid roller-coaster rides of the three major indexes in recent days, resorting to safe-haven assets, such as the U.S. treasury bills, gold and low-risk currencies including the Japanese yen and Swiss franc.
The bond market sent worrying signals over an imminent recession on Wednesday, as the yield of the U.S. 10-year treasury note fell below the yield of the 2-year bill at some point on Wednesday, the first time since 2007.
The spread formed a so-called inverted yield curve, which is widely considered as a harbinger of a future economic recession. It's acknowledged that recessions normally arrive within 18 to 24 months following the inverted yield curves.
Yields of the U.S. long-term and short-term treasury bills all pulled back around midday. Market jitters drove the 30-year treasury bill yield to strike an all-time low of a bit over 2 percent, fueling anxieties over the health of both the U.S. and the global economies. Enditem
