US STOCKS-Wall Street tumbles on rising fears of recession


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    * U.S. Treasury bond curve inverts for 1st time since 2007
    * Macy's slides after FY outlook cut; weighs on rivals
    * Rate-sensitive banks slump
    * Indexes down: Dow 2.12%, S&P 2.14%, Nasdaq 2.38%

 (Changes comment, adds details, updates prices)
    By Medha Singh
    Aug 14 (Reuters) - Wall Street main indexes slid more than
2% on Wednesday, as a closely watched U.S. bond market indicator
pointed to a renewed risk of recession following poor economic
data from Germany and China.
    Yields on the two-year Treasury notes rose above the 10-year
yield for the first time since 2007, a metric widely viewed as a
classic recession signal.  US/ 
    The interest-rate sensitive bank index  .SPXBK  slipped 3.7%
and the broader financial sector  .SPSY  fell 3.0% in response.
    Slumping exports sent Germany's economy into reverse in the
second quarter, while Chinese industrial output growth cooled to
a more than 17-year low in July, underscoring the impact of a
bruising U.S.-China trade war on global growth.*:nL8N25A1D1*:nL4N25A0U7
    "Every economic number that comes out globally will be seen
through the lens of how much trade tensions will negatively
impact growth and subsequently markets," said Massud Ghaussy,
senior analyst, Nasdaq IR Intelligence in New York.
    The downbeat mood followed a rally in Wall Street's main
indexes on Tuesday thanks to the Trump administration's decision
to delay tariffs on some Chinese imports. At current levels, the
benchmark S&P 500 is down 2.7% from the previous session's
    The CBOE Volatility index  .VIX , also known as Wall
Street's "fear gauge, rose 4.08 points to 21.60.
    "Investors don't know when and how the trade war will be
resolved and as long as the situation persists, markets will not
be able to frame risk and we should continue to see volatility,"
Ghaussy said.
    At 11:07 a.m. ET, the Dow Jones Industrial Average  .DJI 
was down 557.26 points, or 2.12%, at 25,722.65, the S&P 500
 .SPX  was down 62.63 points, or 2.14%, at 2,863.69. The Nasdaq
Composite  .IXIC  was down 190.71 points, or 2.38%, at 7,825.65.
    Ten of the 11 major S&P sectors were in the red, with the
energy sector's  .SPNY  3.4% drop leading the decliners.
    Shares of Apple Inc  AAPL.O  were down 2.1% after boosting
markets a day earlier with a 4% rise. Chipmakers were also down,
with the Philadelphia chip index  .SOX  slumping 3%.
    The biggest decliner on the S&P 500 index was Macy's Inc
 M.N , down 15.9%, after the department store operator cut its
full-year profit forecast as it discounted heavily to clear
excess spring season inventory.*:nL4N25A3HF
    Rivals Kohl's Corp  KSS.N , Target Corp  TGT.N  and
Nordstrom Inc  JWN.N  slipped between 2.7% and 10.8%.
    Declining issues outnumbered advancers for a 4.45-to-1 ratio
on the NYSE and for a 4.90-to-1 ratio on the Nasdaq.
    The S&P index recorded eight  new 52-week highs and 42 new
lows, while the Nasdaq recorded 12 new highs and 172 new lows.

 (Reporting by Medha Singh and Arjun Panchadar in Bengaluru;
Editing by Anil D'Silva)
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