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US stocks recover from early swoon amid global growth angst

File photo: New York Stock Exchange. Photograph:( Reuters )

AFP New York, United States Aug 08, 2019, 08.11 AM (IST)

Wall Street stocks finished little changed on Wednesday following a choppy session as a plunge in treasury bond yields early in the day underscored worries about a weakening global economy.

After a bruising start, US stocks gradually pushed higher throughout the day while Treasury yields recovered from their lows. Two of the three major indices finished in positive territory.

Decisions by Asian central banks to cut interest rates and weak German data "reminded investors that economic growth in several other regions of the world remain at risk as the US and China trade dispute drags on," said CFRA strategist Lindsey Bell in a note.

"While uncertainty is driving upside in defensive asset classes, we don't think stocks should be abandoned at this time. A near-term recession is unlikely."

The Dow Jones Industrial Average finished at 26,007.07, down 0.1 per cent but more than 560 points above its session low.

The broad-based S&P 500 added 0.1 per cent at 2,883.98, while the tech-rich Nasdaq Composite Index gained 0.4 per cent to 7,862.83.

US stocks have been under pressure in August as optimism over a Federal Reserve interest rate cut has been replaced by unease at US President Donald Trump's latest tariffs on China and China's response, which has included halting US agricultural purchases.

Banking shares were big losers as the weakening US interest rate outlook crimps the profit outlook. JPMorgan Chase, Wells Fargo and Bank of America all lost around two per cent or more.

Disney also had a bad day, losing 4.9 per cent after missing earnings forecasts. 

But CVS Health shot up 7.5 per cent as the pharmacy chain lifted its profit forecasts. The results also lifted rival Walgreens Boots Alliance, which gained 2.0 per cent.
 

Story highlights

After a bruising start, US stocks gradually pushed higher throughout the day while Treasury yields recovered from their lows. Two of the three major indices finished in positive territory.