US stocks head south on economic fears

New York: Wall Street moved sharply lower in late-morning trading on Friday, threatening to wipe out the week’s gains as investors reacted to somber news about the global economy.

Shortly before 1530 GMT, the Dow and broader S&P 500 were both down 1.1 percent at 25,679.70 and 2,823.13, respectively.

The tech-heavy Nasdaq dropped 1.4 percent to 7,729.04.

“Another round of weak economic data in Europe has weighed on sentiment,” analysts and wrote — pointing to monthly manufacturing surveys for France and Germany, which fell further into contraction.

Meanwhile, a rally on bond markets further weakened US Treasury yields, causing the so-called yield curve to flip, which — if sustained — economists say is often a reliable indicator that a recession is coming.

Yields on three month Treasurys were at 2.445 percent, a hair below the yield on 10-year Treasurys at 2.441 percent.

Shares in US aviation giant Boeing, which weighs heavily on the Dow, were down more than two percent after an Indonesian air carrier became the first to cancel an order of its previously top-selling 737 MAX aircraft in the wake of two recent fatal crashes.

Meanwhile, fellow Dow member Nike had plunged five percent after posting disappointing North American sales along with earnings estimates released Thursday.

In other news, IHS Markit’s flash purchasing manager’s index for fell to a 21-month low in March, pointing to further pain in the US manufacturing sector.

In one bright spot, the National Association of Realtors reported that US homebuyers had snapped up existing homes in February, posting the biggest increase in more than three years.