US STOCKS-US stocks stumble on fears of looming recession – Yahoo Finance

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* 2-year, 10-year Treasury yields invert for 1st time in 12 yrs

* Gloomy economic data from Germany, China

* Macy’s slides after FY outlook cut; weighs on rivals

* Rate-sensitive banks slump

* Indexes drop: Dow 2.49%, S&P 2.45%, Nasdaq 2.70% (Updates to late afternoon, changes dateline, byline)

By Stephen Culp

NEW YORK, Aug 14 (Reuters) – Wall Street stumbled on Wednesday as investors fled equities for safe-haven assets, seeking shelter amid gathering signs that a recession could be on the horizon.

All three major U.S. indexes were sharply lower as short- and long-dated Treasury yields inverted for the first time in 12 years, a potential signal of imminent recession.

Elsewhere, ominous indicators suggested a faltering global economy, hobbled by the intensifying U.S.-China trade war, Brexit jitters and geopolitical concerns. Germany reported a contraction in second-quarter GDP, and China’s industrial growth in July hit a 17-year low.

“Every central bank around the world is trying to prop up economies and every politician around the world is trying to destroy economies,” said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York. “What’s happening in Hong Kong, what’s happening with Brexit and the trade war, it’s all a mess.”

Yields for 2-year and 10-year Treasuries inverted for the first time since June 2007, months before the onset of the great recession, which crippled markets for years.

Such a yield inversion is held by many as a traditional harbinger of recession.

“When you’re in an ultra-low interest rate environment as we’ve been, you’ve got to ask if the old metrics still apply,” Pursche added. “My guess is yes.”

The CBOE volatility index, a gauge of investor anxiety, jumped 4.26 points to 21.78.

Spot gold prices rebounded, rising over 1% as market participants fled stocks for the precious

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