Dow sinks 770 points Wednesday afternoon as flashing recession signal rattles stock market

The Dow Jones Industrial Average was trading at session lows on Wednesday morning as investor anxieties about a recession in the U.S. and elsewhere hurt buying. The Dow was off 772 points, or 2.9%, at 25,508, the S&P 500 index was down 2.9% at 2,843, while the Nasdaq Composite Index was down 3% at 7,772. Part of the impetus for stocks heading sharply lower was an inversion of the 2-year Treasury and the 10-year Treasury notes , which took place at about 6 a.m. Eastern Time. The spread between the 2-year note and the 10-year note temporarily fell to a negative 1 basis point. An inversion of this measure has often preceded an economic downturn. Investors say its powers as a recession indicator comes from its ability to reflect when tight monetary policy is capping growth and inflationary pressures. A yield curve inversion along the 2-year and 10-year spread has come before the last seven recessions.

*story by Market Watch News