NEW YORK (AP) — Stocks and interest rates tumbled Tuesday after fresh signs of a global economic slowdown spooked investors.
U.S. markets are following those in Asia, which fell when Japanese data showed that the nation’s recovery has slowed. And then European indexes fell sharply after Greek workers walked off the job to protest steep budget cuts.
Interest rates fell in the bond market with investors seeking the safety of Treasuries. The yield on the 10-year note dropped to as low as 2.97 percent, the first time it has fallen below 3 percent since April 2009. The yield, which is used as a benchmark for many consumer loans and mortgages, bounced off its low and edged up to 2.99 percent.
Falling yields are a sign that investors are willing to forego potential big gains in stocks for more certain, but smaller profits in bonds.
Investors are worried that the global rebound is weakening. Consumers may be similarly shaken. A report due out Tuesday on consumer confidence is expected to show confidence fell in June after three straight months of gains.
Economists polled by Thomson Reuters forecast the Conference Board’s consumer confidence index fell to 62.8 from 63.3 last month. The index needs to climb above 90 to indicate the economy is on solid footing.
Companies have indicated things are getting better, yet there are few signs they are ready to hire in big numbers. The Labor Department’s monthly employment report due out Friday is expected to show the unemployment rate rose 0.1 percent to 9.8 percent in June.
In early morning trading, the Dow Jones industrial average dropped 129.01, or 1.3 percent, to 10,011.40. The Standard & Poor’s 500 index fell 15.14, or 1.4 percent, to 1,059.43, while the Nasdaq composite index plummeted 39.55, or 1.8 percent, to 2,181.10.
A report that showed home prices rose in April did little to affect trading. The S&P/Case-Shiller home price index 20-city home price index rose 0.8 percent between March and April. The gains, though, are likely being written off because April was the final month when buyers could receive a tax credit. Nearly all housing indicators got a boost in April from the credit, but have since shown a slowdown in the market.
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