Stock market slides again on economic fears
The stock market's jitters about the U.S. debt ceiling are over, but its concerns about the economy are growing rapidly.
The Dow Jones industrial average tumbled more than 150 points Tuesday morning, its eighth-straight losing day, as investors worried that the debt-ceiling agreement could further weaken an already torpid economy.
Investors scrambled into gold and U.S. Treasury bonds, perceived havens, as chatter on Wall Street turned to whether the economy might be headed back into recession.
The selling was driven by a government report that showed consumer spending suffering its worst decline in June since September 2009. Consumer spending fell 0.2%, compared with the 0.1% increase that economists expected.
Combined with a related rise in personal savings, the economic news indicated that the American public –- bombarded by ubiquitous warnings about the debt ceiling and reeling from chronic unemployment -– is further pulling in its horns.
As of 11:30 a.m. PDT, the Dow was off 158.33 points, or 1.3%, to 11,974.16.
Foreign stock markets sold off heavily, with the Spanish and German markets sinking more than 2%.
Treasury bonds continued their startling three-day rally. The yield on the benchmark 10-year Treasury note plunged to a nine-month low of 2.62% from 2.75% on Monday.
The yield on the 30-year Treasury bond skidded below 4%, falling to 3.93% from 4.08%. It was at 4.28% a week ago.
-- Walter Hamilton