US stock indexes end mostly higher after volatile day

US stock indexes end mostly higher after volatile day

The S&P 500 flipped between modest gains and losses in morning trading, a day after it plunged to one of its worst losses of the year after the bond market sent out a fairly reliable warning signal of recession.

Stocks around the world remained stuck in the spin cycle Thursday, as worries about a possible recession collided with hopes that the strongest part of the USA economy - shoppers spending at stores and online - can keep going.

All three major USA stock indexes fell Wednesday upon rising concerns of an approaching recession, signaled in part by the benchmark 30-year Treasury bond falling to a record low.

Analysts view both bonds as a key indicator in US economic health, and some expressed concern Wednesday the losses might indicate a coming recession.

As recession warnings flashed from the bond market, Wall Street plummeted lower overnight.

Earlier Thursday, stocks in China had rebounded from early declines. The benchmark index swung between a 0.6 percent gain and 0.5 percent loss. The day before, it dived 2.9%.

The S&P 500 rose 7 points, or 0.2%, to 2,847.60.

Other indexes didn't catch the bounce. The Nasdaq composite dropped 7.32 points, or 0.1%, to 7,766.62, while the Russell 2000 index of smaller companies lost 5.87 points, or 0.4%, to 1,461.65.

"It's nearly as if global investors either don't buy the tariff delay as a sign of real progress in the US-China trade war or have been too consumed by further evidence of global economic weakness to care", BMO Capital Markets strategist Stephen Gallo said.

Analysts say similar inversions of the 10-year Treasury note and the 3-month Treasury bill have preceded every recession in modern US history.

That trend continued in July, the first month of the third quarter, as retail sales jumped 0.7 percent, far more than expected, driven by e-commerce and Amazon's 48-hour prime "day", according to new data from the Commerce Department. -China trade war as among the top reasons for recession anxiety, as well as potential shock from an upcoming hard-Brexit.

The US central bank also came under renewed pressure from US President Donald Trump for not doing enough to support the world's largest economy.

Those concerns helped drive the yield on the 10-year Treasury to 1.56% Thursday, down from 1.58% late Wednesday and from more than 3% late last year.

A different part of the Treasury curve that compares three-month yields against 10-year yields had already inverted, but the shift in this area is the latest indication of growing unease in the fixed income market.

The US bond market showed red flags, with two-year Treasury yields rising above those for 10-year paper for the first time since 2007, pointing to the risk of recession. It also recovered some of its decline and stood at 1.96 percent Thursday afternoon. When anxious about weaker economic growth and inflation, they tend to pile into Treasurys, which pushes up their prices and in turn pushes down yields.

Hussein Sayed, chief market strategist at broker FXTM said "the countdown to a recession" had started.

American consumers appear to be carrying the United States economy in their shopping carts as manufacturing slumps amid President Donald Trump's trade conflict with China, and financial signals warn of a possible recession. -China trade agreement may be imminent, investors are increasingly digging in for the tensions to drag on for years. Hong Kong's Hang Seng added 0.8% to 25,701.58. The S&P 500, though, remains within 6% of its record set late last month.

"The fact is that no one actually knows what is next for the markets", said Fiona Cincotta, senior market analyst at City Index.

By December 15 all goods imported from China will face stiff U.S. tariffs, and markets are watching anxiously for signs of progress in the dispute.

Cisco Systems dropped 8.6% - one of the sharpest losses in the S&P 500 - after the technology giant gave a profit forecast that fell short of some analysts' expectations. "Consumers are in the best shape ever, plenty of cash".

Besides Walmart's surge, Procter & Gamble rose 1.4 percent and Coca-Cola gained 1.7 percent.

General Electric sank 11.3% on news that the industrial conglomerate is being accused of hiding its financial problems by Harry Markopolos, the whistleblower known for outing Bernie Madoff.

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