Dow plunges by almost 600 points on mounting recession fears

Dow plunges by almost 600 points on mounting recession fears

- in Business
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Wall Street took heavy losses on Wednesday, with all three major indices declining by 2 percent as disappointing employment data and a contraction in manufacturing activity fueled fears of an impending recession.

The Dow Jones Industrial Average dropped by as much as 598 points, or 2.24 percent, on Wednesday, wiping out all gains for the third quarter. The S&P 500 suffered a similar fate, falling 2.07 percent and erasing any yield for the last quarter. The tech-heavy Nasdaq lost 2 percent as Amazon, Apple, and Microsoft fell.

President Donald Trump blamed the Democrats for the market sell-off, tweeting that “impeachment nonsense” was driving down “the Stock Market, and your 401K’s.”

Employment data from private payroll company ADP released Wednesday morning revealed job gains of just 135,000 for the month of September. While that number beat analyst expectations of 125,000, it brings the monthly average down to just 145,000 for 2019 — far below last year’s monthly average of 214,000 positions added.

Following a rocky third quarter that saw markets parse ramped-up trade war rhetoric between China and the U.S., declines extended into the fourth quarter after a key gauge of factory activity released Tuesday revealed the biggest slowdown in manufacturing output in a decade. Economists and investors have pointed to uncertainty around trade as a reason for supply chain disruption and stalled capital spending.

Friday’s employment report from the Bureau of Labor Statistics will be closely watched for further indication of a manufacturing slowdown in terms of job losses in that sector.

“The weakening conditions in Europe and the slowdown in China is all adding up to the same thing: worries that the global economy is slowing,” Robert Pavlik, chief investment strategist manager at SlateStone Wealth, told Reuters.

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