Markets Right Now: Stocks turn jittery again, Dow sinks 500

US markets sink on worries over slowing growth, trade truce outcome

The falls came on the back of doubts of a trade deal being reached between the United States and China.

Stocks took a tumble Tuesday as the Dow Jones Industrial Average fell almost 800 points amid renewed fears regarding the U.S.

The sharp drop in yields hurt banks because it makes it harder to earn money from lending.

Financial shares .SPSY , which are particularly sensitive to bond market swings, dropped 4.4 percent. The S&P 500 index closed at 2,700, down 90 points or 3.24 percent. The Nasdaq composite lost 3.8 percent to 7,158.43.

Stocks are turning sharply lower on Wall Street as trading turns jittery again, erasing 500 points from the Dow Jones Industrial Average.

European markets closed lower yesterday: London's FTSE fell 0.6per cent, Paris dropped 0.8 per cent and Frankfurt shed 1.1 per cent.

The S&P 500 lost 63 points, or 2.3 percent, to 2,727. Eastern Time. The Dow plunged 730 points, or 2.8 percent, to 25,095, more than erasing its 488-point gain over the previous two trading days.

The trade-sensitive industrial sector .SPLRCI fell 4.4 percent, with Boeing BA.N and Caterpillar CAT.N declining 4.9 percent and 6.9 percent, respectively.

The jitters helped drive demand for government bonds Tuesday, pushing prices higher. The spread between the 10-year yield over its two-year counterpart also shrank to the smallest in over a decade, a closely watched signal because a so-called yield curve "inversion", when the two-year yields more than the 10-year bond, preceded all the recessions of the past 50 years.

The sell-off came ahead of Wednesday's closure of US stock and bond markets in observance of a national day of mourning for former President George H.W. Bush.

Bank of America fell 5.1 percent.

Defensive Utilities .SPLRCU eked out a 0.2 percent gain, the only one of the 11 major S&P 500 sectors in positive territory.

The Dow lost 536 points, or 2.1 percent, to 25,292.

A day after global stocks rallied on a weekend US-China announcement suspending new tariffs, global markets mostly pulled back as investor focus shifted to the murkiness over what was agreed to and the difficulty reaching resolution to disputes on thorny matters such as intellectual property.

Technology companies, banks and industrial stocks accounted for much of the broad sell-off.

Apple lost 4.4 percent to $176.69 after the consumer electronics giant was downgraded by HSBC analysts, citing the possibility that iPhone volume and value growth may moderate due to a saturated mobile phone market. Japan's Nikkei 225 index gave up 2.4 percent and the Kospi in South Korea lost 0.8 percent.

The Toronto Stock Exchange's S&P/TSX composite index was down 197.31 points, or 1.29 per cent, at 15,077.67.

Yields on two-year and three-year bonds held above the five-year yield for a second day, while the benchmark 10-year yield hit its lowest since mid-September as demand for longer-dated Treasuries rose on bets of an approaching economic slowdown.

Stocks are opening lower on Wall Street, led by losses in technology companies and banks.

Apple lost 1.7 per cent early Tuesday and Bank of America was down 1.3 per cent.

Discount retail chain Dollar General slid 8.2 per cent to $102.54 after the company reported weak quarterly results. Toll's shares rose 0.4 per cent to $33.67, recovering from a morning sell-off.

Bond prices rose. The yield on the 10-year Treasury fell to 2.95 percent.

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