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Recession fears hit Wall Street after grim China, German data

Reuters logo Reuters 8/14/2019 Medha Singh
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Wall Street opened sharply lower Wednesday as poor economic data from China and Germany put the focus back on the impact of a bruising China-U.S. trade war that is pushing some major economies toward the brink of recession.

The outlook for Germany's export reliant economy was also grim and Chinese industrial output growth cooled to a more than 17-year low, adding to headwinds for U.S. multinationals that rely on global demand.

The U.S. 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.

Wall Street's main indexes surged more than 1.5% on Tuesday after Washington delayed the introduction of tariffs on some Chinese consumer goods.

"It's almost as if global investors either don't buy the tariff delay as a sign of real progress in the U.S.-China trade war or have been too consumed by further evidence of global economic weakness to care," BMO Capital Markets strategist Stephen Gallo said.

At 8:28 a.m. ET, Dow e-minis were down 361 points, or 1.37%. S&P 500 e-minis were down 39.25 points, or 1.34% and Nasdaq 100 e-minis were down 119 points, or 1.54%.

Banks were among the losers in trading before the bell, with Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co, Goldman Sachs, Wells Fargo & Co and Morgan Stanley down between 2.3% and 3.1%.

Shares of Apple were down after boosting markets a day earlier with a 4% rise.

Chipmakers were also trading lower, with Micron Technology, Broadcom and Nvidia down more than 2%.

Macy's tumbled after the department store operator cut its full-year profit forecast as it discounted heavily to clear excess spring season inventory.

Rivals Target Corp and Nordstrom Inc slipped between 3.8% and 4.5%. (Reporting by Medha Singh and Arjun Panchadar in Bengaluru; Editing by Anil D'Silva)

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