Posted on 12/27/2005 1:36:38 PM PST by SierraWasp
Dow slumps triple digits as Treasury yield curve inverts ($INDU, $COMPQ, $SPX, $TNX) by Tomi Kilgore
NEW YORK (MarketWatch) -- U.S. stocks closed sharply and broadly lower, with the Dow industrials suffering its first triple-digit loss in 2 months, as the Treasury yield curve inverted for the first time in five years, sparking fears of a possible recession. The Dow ($INDU) slumped 105 points to an unofficial close of 10,778, its lowest close in 2 weeks and the biggest one-day point loss since Oct. 27. The Nasdaq Composite ($COMPQ) shed 22 points to 2,227 and the S&P 500 ($SPX) slid 12 points to 1,257. The 2-year Treasury note yielded 4.347% while the 10-year Treasury yield ($TNX) fell 0.039 percentage points to yield 4.341%; the only time in the last 30 years that an inverted yield curve wasn't followed by a recession was in 1998, when the curve inverted briefly during the Asian financial crisis. Recession worries overshadowed a sharp drop in natural gas prices amid reports of warmer-than-usual weather, with the front-month futures contract tumbling 10% to a 4-month low of $11.022 per million British thermal units on the New York Mercantile Exchange.
(Excerpt) Read more at bigcharts.marketwatch.com ...
Thank the Fed.
If they hadn't overreached in their raising of short term rates, there wouldn't be a yield curve inversion.
I remember clearly the recession of 1998.
An inverted yield curve is a good recession indicator except when it's not.
ditto
I believe the term you're looking for is "right once in a row."
Yeah. Me too.
I think it's more of an indicator that the increases in interest rates are going to stop. A lot of times, they stop because the Fed has overshot the target and caused a recession. This time, if they stop in time, maybe that's not a problem (rates were really awfully low before, now they are more normal.)
It would be a great thing if they could just stop raising rates now, and leave things alone and let the economy coast for a few years without screwing around with it.
I felt the recession pass. It's over already. Everyone can relax now.
Morons.. loser sell-off to claim losses for 2005. It'll all get bought back in about ummm... 31 days.
Exactly what is wrong with a strong economy with low inflation that precipitates continual rises in the short term rate?
YOU ARE CORRECT.
Today was the last day of the year to sell your losers and get the tax benefit this year.
I had forgotten all about that. Then again I have no dogs to get rid of.
That is exactly what I was thinking. It's tax-protection week for the big traders.
Sellers can get the tax benefit if they sell any time this week.
I don't like blaming any single incident for a one-day move in the stock market. We should all check up on this thread in a few months.
YOu got it. End of year profit-taking.
The market is driven by rumor, the drop in gas and oil prices are hedge funds locking profits, there has been a lot of play in that area. It seems to be a good time to bargain pick.
Gee, thanks Fed.
i got $35 oil by the end of the year wrong - in my fantasy game, but speculators are going to pay for betting against the American dream in 2006.
Doesn't it still take 3 days to settle (t+3) in which case tax losses taken tomorrow will be settled in the new year.
You are all on record as saying today's stockmarket activity is the result of end-of-year tax selling. Is that a prediction that the stock market will decline all this week? If the stock market rises over the next three days, how can you reconcile that with your tax selling theory? Will you remember your explanations for today's activity on the stock market after today?
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