Stocks move higher to end turbulent week


Wall Street had another turbulent day Thursday that kept stock indexes flipping between gains and losses.

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. The Dow Jones Industrial Average (DJIA) was down 800 points, NASDAQ down over 240 points, and the S&P 500 dropping 85 points.

Losses accelerate throughout the day with the Dow closing 800 points lower, or 3%. Both the S&P 500 and Nasdaq were also off more than 2.5 percent.

"Although Treasury yields are climbing away from record lows on Friday as some tranquility returns to markets, the movements in the bond markets are poised to remain on investors radars in the week ahead", Lukman Otunuga, senior research analyst at FXTM, said.

Long-term Treasury yields jumped after a Bloomberg report revealed the US Treasury Department planned on reaching out to market participants regarding the possibility of issuing ultra-long bonds.

Even as markets calmed, many analysts and traders said they were still on edge.

The yield rose as high as 1.54% by Thursday afternoon, though, which appeared to put some investors in a buying mood. The Dow gained 0.5% to 25,602. The 10-year Treasury yield and 30-year Treasury yield starts to decline.

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But recession worries were enough to send the Dow Jones Industrial Average down more than 650 points - or, 2.5 percent - on the move in yields. JPMorgan Chase rose 2.4% and Bank of America rose 2.9%.

Mr Trump also criticised the Federal Reserve for hamstringing the United States economy by raising rates "too much & too fast" a year ago and not reversing its policy aggressively enough - the Fed cut its key rate by a quarter point last month.

Investors favoured smaller company stocks, which pushed up the Russell 2000. The central bank lowered interest rates by a quarter-point at its last meeting.

Meanwhile, the technology-focused Nasdaq Composite Index rose 1.7% to 7,896.09. That would mark the second monthly loss for the broad index this year, following a drop in May, in what has generally been a good year.

Elsewhere, consumer sentiment in the USA deteriorated in August, hitting its lowest level since the start of the year, according to a preliminary reading from the University of MI.

When comparing the performance of the S&P 500 in the following 6-months after the past five USA 2s10s curve inversion, the index has typically risen, averaging gains of almost 5%.