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US Stocks Slip Deeper as Recession Fear09/26 11:13

   Stocks fell in midday trading on Wall Street Monday and put major indexes 
deeper into a slump as recession fears grow.

   NEW YORK (AP) -- Stocks fell in midday trading on Wall Street Monday and put 
major indexes deeper into a slump as recession fears grow.

   The S&P 500 fell 0.3% as of 11:56 a.m. Eastern. The Dow Jones Industrial 
Average fell 141 points, or 0.5%, to 29,585. The tech-heavy Nasdaq rose 0.2%.

   The British pound dropped to an all-time low against the dollar and 
investors continued to dump British government bonds in displeasure over a 
sweeping tax cut plan announced in London last week.

   Markets in Europe were mostly lower. The head of the European Central Bank 
warned that the economic outlook "is darkening" as high energy and food prices 
pushed up by the war in Ukraine sap consumer spending power. France, the EU's 
second-biggest economy, forecast a substantial slowdown in economic growth next 
year.

   Losses were broad in U.S. markets and included banks, health care companies 
and retailers. Bank of America fell 2.1% and Target fell 1.9%.

   Casino and resort operators were a bright spot following reports that the 
gambling center of Macau will loosen travel restrictions in November. Wynn 
Resorts jumped 13.1%.

   The muted opening to the week comes amid an extended slump for major 
indexes. The benchmark S&P 500 is down roughly 7% in September. Stocks have 
been weighed down by concerns about stubbornly hot inflation and the risk that 
central banks could push economies into a recession as they try to cool high 
prices on everything from food to clothing. Investors have been particularly 
focusing on the Federal Reserve and its aggressive interest rate hikes.

   The Fed raised its benchmark rate, which affects many consumer and business 
loans, again last week and it now sits at a range of 3% to 3.25%. It was at 
virtually zero at the start of the year. The Fed also released a forecast 
suggesting its benchmark rate could be 4.4% by the year's end, a full point 
higher than envisioned in June.

   The goal is to make borrowing more expensive and effectively crimp spending, 
which would cool inflation. But, the U.S. economy is already slowing and Wall 
Street is worried that that the Fed's rate hikes will pump the brakes too hard 
on the economy and cause a recession.

   Higher interest rates hurt all kinds of investments, especially pricey 
technology stocks, and the market has been in a broad slump as rates rise. 
Treasury yields have climbed to multiyear highs as interest rates rise.

   The yield on the 2-year Treasury, which tends to follow expectations for 
Federal Reserve action, rose to 4.27% from 4.21% late Friday. It is trading at 
its highest level since 2007. The yield on the 10-year Treasury, which 
influences mortgage rates, rose to 3.79% from 3.69%.

   The recent rise in the U.S. dollar against other currencies is a concern for 
many countries. It dents profits for U.S. companies with overseas business and 
puts a financial squeeze on much of the developing world.

   Companies are nearing the close of the third quarter and investors are 
preparing for the next round of earnings reports. That will give them a better 
sense of how companies are dealing with persistent inflation.

   Investors also have several economic reports on tap for this week that will 
give more details on consumer spending, the jobs market and the broader health 
of the U.S. economy.

   The latest consumer confidence report, for September, from business group 
The Conference Board will be released on Tuesday. The government will release 
its weekly report on unemployment benefits on Thursday, along with an updated 
report on second-quarter gross domestic product.

   On Friday, the government will release another report on personal income and 
spending that will help provide more details on where and how inflation is 
hurting consumer spending.

 
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