Dow plummets 800 points on worsening global recession fears

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Stocks and oil prices plummeted Wednesday, with the Dow Jones Industrial tumbling 800 points -- the fourth largest daily point drop on record and the worst this year -- as increasing global recession fears drove Wall Street investors to the safety of U.S. government debt.

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The yield, or interest rate, of the Treasury’s 2-year note exceeded the yield on the 10-year Treasury, an ominous signal, known as an inverted yield curve, that a recession is on the way.

Feeding fears of a global recession was a report that Chinese industrial production was climbing at its weakest rate in 17 years and Germany’s economy -- Europe’s strongest -- was actually shrinking.

TickerSecurityLastChange%Chg
I:DJIDOW JONES AVERAGES26072.24-63.55-0.24%
SP500S&P 5002917.61-6.04-0.21%
I:COMPNASDAQ COMPOSITE INDEX7996.527707-6.28-0.08%

Gold, often seen as a haven for investor assets, settled 0.91 percent at $1,515.90, a 52-week high and the highest level in more than six years.

Oil also tanked on global recession concerns, with the benchmark U.S. crude falling 5 percent to $54.23 per barrel.

Germany's economy shrank by 0.1 percent in the second quarter from the previous three-month period as global trade conflicts and troubles in the auto industry weighed on Europe's largest economy.

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The major European markets ended the day drastically lower with the German Dax and French CAC losing more than 2 percent each.

The news was similar in Asia as China's factory output, retail spending and investment weakened in July, suggesting the world's second-largest economy faces downward pressure on growth.

China's factory output rose 4.8 percent over a year earlier, a marked decline from June's 6.3 percent. Retail sales growth slowed to 7.6 percent from the previous month's 9.8 percent.

Japan's Nikkei added nearly 1 percent, Hong Kong's Hang Seng inched up less than 0.1 percent and the Shanghai Composite edged up 0.4 percent.

TickerSecurityLastChange%Chg
MMACY'S INC.15.68-0.45-2.79%
KSSKOHL'S CORP.45.90-2.30-4.77%
JWNNORDSTROM25.37-0.73-2.80%

Macy's reported a 48 percent drop in quarterly profit and cut its forecast for full-year adjusted earnings on Wednesday, sending shares tumbling. Rival retailers Kohl's, Target and Nordstrom also fell.

Technology shares, including Apple, also took a hit. Chipmakers joined the selling.

TickerSecurityLastChange%Chg
AAPLAPPLE INC.212.37+2.02+0.96%
INTCINTEL CORPORATION46.62-0.61-1.30%
AMDADVANCED MICRO DEVICES INC.30.83-0.65-2.08%
XLNXXILINX INC.106.92+0.01+0.01%
MUMICRON TECHNOLOGY INC.44.75-0.26-0.58%

Shares of commercial and investment banks were also hammered.

TickerSecurityLastChange%Chg
JPMJP MORGAN CHASE & CO.108.17-0.53-0.48%
WFCWELLS FARGO & COMPANY44.80-0.45-0.98%
BACBANK OF AMERICA CORP.26.93-0.34-1.27%
GSGOLDMAN SACHS GROUP INC.201.16-1.04-0.51%
MSMORGAN STANLEY40.16-0.21-0.53%

On the economic front, the Labor Department said on Wednesday import prices increased 0.2 percent last month as a rebound in the cost of petroleum products offset declines in prices for capital goods and motor vehicles.

The Associated Press contributed to this article