Stocks plunge over recession fears.
The U.S. stock market plunged on Wednesday, as dismal jobs data raised fears that the world’s largest economy was barreling towards recession.
All of Wall Street’s major indices reported put up sharp losses Wednesday. The Dow Jones Industrial Average (NYSEARCA:DIA) declined 494.42 points, or 1.9%, to 26,078.62. The blue-chip index was down nearly 600 points earlier in the day.
The broad S&P 500 Index (NYSEARCA:SPY) plunged 1.8% to 2,887.61. All 11 primary sectors reported losses, led by energy shares.
Meanwhile, the technology-focused Nasdaq Composite Index (NYSEARCA:QQQ) fell 1.6% to 7,785.25.
A measure of implied volatility known as the CBOE VIX (NYSEARCA:VXX) rose sharply on Wednesday, as rocky trading conditions returned to Wall Street. The market’s preferred measure of investor anxiety reached a session high of 21.46 on a scale of 1-100 where 20 represents the historic average. VIX settled up 10.8% at 20.56.
In data news, U.S. private sector employment rose weaker than expected in September, amplifying concerns of a broad cooldown in the economy.
Private payrolls increased by 135,000 in September, down from 157,000 in August, ADP reported Wednesday. Analysts in a median forecast were calling for a reading of 140,000.
“Businesses have turned more cautious in their hiring. Small businesses have become especially hesitant. If businesses pull back any further, unemployment will begin to rise,” Mark Zandi, chief business economist of Moody’s Analytics, said in a statement
The Final Word: Job creation is weakening at a precarious time in the U.S. economy. The manufacturing industry appears to be in recession over the U.S.-China trade war. A failure to reach a resolution later this month could spell bad news for stocks.