Stocks slide lower as economic growth worries spread

Associated Press

U.S. stocks slumped this afternoon and bond yields fell sharply as investors worried that global economic growth is slowing.

The wave of selling knocked more than 350 points off the Dow Jones Industrial Average and put the benchmark S&P 500 index on track for a weekly loss.

Banks, technology companies and health-care stocks drove much of the broad slide. Investors shifted money into lower-risk, high-dividend stocks. Utilities and makers of consumer products were the only sectors to rise.

Those sectors became more attractive to investors seeking income as traders bought up bonds, sending yields lower.

The yield on the benchmark 10-year Treasury note, which is used to set rates on mortgages and many other kinds of loans, fell to 2.45 percent from 2.54 percent late Thursday, a big move. That's down sharply from its recent high of 3.23 percent in early October.

In another worrying sign, the yield on the 10-year Treasury note fell below the yield on the three-month Treasury bill. When that kind of "inversion" in bond yields occurs, economists fear it can signal a recession within the coming year. That signal isn't always correct, however.

The push into bonds comes as investors worry about slowing economic growth elsewhere in the world, especially Europe.

Key bond yields fell this week to their lowest levels in more than a year after the Federal Reserve said it was seeing slower growth in the economy and no longer expected to raise interest rates this year.