US STOCKS-Wall Street sinks as U.S. bond market stokes recessionary fears

* Indexes plummet: Dow 1.77%, S&P 1.47%, Nasdaq 1.23%
* U.S. 10-yr yields hit lowest levels since Oct 2016
* China's offshore yuan slides past 7-per-dollar mark
* All major S&P sectors in the red; financials weigh the
most

(Updates to open)
By Medha Singh
Aug 7 (Reuters) - U.S. stocks plunged on Wednesday, with the
Dow Jones Industrial Average falling more than 450 points, as
investors were spooked by the latest signals from the bond
market that pointed to heightened risk of a recession.
U.S. Treasury yields took another dramatic drop and the
premium on three-month bill rates US3MT=RJR above 10-year note
yields US10YT=RJR was at its most elevated levels since March
2007. This so-called inversion between the two maturities has
preceded every U.S. recession in the past 50 years. US/
Traders raised bets that the Federal Reserve would cut key
borrowing costs three more times by year-end, with markets fully
pricing in a reduction in September. MMT/
This comes on the heels of monetary easing from central
banks in New Zealand, India and Thailand on Wednesday, and as
fears of the trade war hurting global growth remerged after
President Donald Trump last week threatened to slap 10% levies
on the rest of $300 billion of Chinese imports. "(Markets) are moving lower on global growth concerns. And
coming into question is the broader fundamental strength of
economies around the world, " said Mike Loewengart, vice
president, investment strategy, at E*TRADE Financial Corp.
The interest-rate sensitive S&P 500 banks sub-sector
.SPXBK slipped 3.41%. The broader financial index .SPSY
dropped 2.60%, the most among the 11 major S&P sectors which
were all lower.
At 9:57 a.m. ET, the Dow .DJI was down 461.62 points, or
1.77%, at 25,567.90, and the S&P 500 .SPX was down 42.25
points, or 1.47%, at 2,839.52. The Nasdaq Composite .IXIC was
down 96.50 points, or 1.23%, at 7,736.77.
China's offshore yuan CNH= fell through the key level of
7-per-dollar mark after recovering partly on Tuesday that had
sparked a 1% gain in the three main Wall Street indexes. CNY/
With the second-quarter earnings season winding down, about
73% of the 426 S&P 500 companies that have reported results so
far have topped earnings estimates.
Walt Disney Co DIS.N dropped 5.7% after its quarterly
earnings missed analysts' forecast as the company invested
heavily in its streaming platform and began folding in assets
purchased from Twenty-First Century Fox. CVS Health Corp CVS.N rose 5.1% after the drugstore chain
posted profit above estimates, boosted by strong sales in the
Aetna health insurance business it acquired last year and raised
its full-year earnings forecast. Declining issues outnumbered advancers for a 4.65-to-1 ratio
on the NYSE and for a 3.42-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week high and 29 new lows,
while the Nasdaq recorded 15 new highs and 132 new lows.