The major equity indexes ended the trading day in negative territory on Wednesday as Treasury bond yields were lower once again and a prolonged inversion in the yield curve fanned fears of a recession.
Benchmark 10-year Treasury yields slid, but came off 15-month lows reached overnight, as attention remained focused on central bank dovishness on a global basis.
The yield curve inverted for the first time since 2007 on Friday and, if the inversion persists, some experts say it could indicate a recession is likely in one to two years.
Bank and financial stocks fell, with the S&P 500 financial index ending the trading day down 0.4 percent.
Worries about global growth have risen recently amid weak economic data, and the Federal Reserve last week abandoned projections for any interest rate hikes this year.
At the same time, the European Central Bank became the latest central bank to delay a planned increase in rates amid rising threats to growth.
Lennar rose 3.9 percent after the company said it expected the housing market to improve, while shares of KB Home, which reported upbeat results late Tuesday, were up 2.7 percent.
Also helping was a survey that showed mortgage applications in the week ended March 22 rose nearly 9 percent amid lower interest rates, according to the Mortgage Bankers Association.
Centene’s shares fell 5 percent after the health insurer said it would buy smaller rival WellCare Health Plans Inc for $15.27 billion. Shares of WellCare rose 12.3 percent.
Approximately 6.97 billion shares changed hands on the major domestic equity exchanges on Wednesday, as compared to the 7.64 billion share average over the past 20 trading days.
Current Account Deficit at 10-Year High
The current account deficit increased more than expected in the fourth quarter amid declining exports, pushing the overall shortfall in 2018 to its highest level in 10 years, as corporations repatriated a record amount of foreign earnings following the Republican tax overhaul.
The Commerce Department said on Wednesday the current account deficit, which measures the flow of goods, services and investments into and out of the country, rose 6.1 percent to $134.4 billion. The quarterly current account gap was the largest since the fourth quarter of 2008.
Data for the third quarter was revised to show the deficit rising to $126.6 billion from the previously reported $124.8 billion.
The current account gap represented 2.6 percent of gross domestic product in the fourth quarter, the largest share since the second quarter of 2012. It was up from 2.5 percent in the July-September period.
The deficit increased 8.8 percent in 2018 to $488.5 billion, the highest level since 2008. For all of 2018, the current account deficit averaged 2.4 percent of GDP, the biggest share since 2012, from 2.3 percent in 2017.
The deficit on the current account has shrunk from a peak of 6.2 percent of GDP in the fourth quarter of 2005, in part because of a significant increase in the volume of oil exports.
In the fourth quarter, exports of goods fell 0.9 percent to $416.1 billion, while imports were unchanged at $649.1 billion.
Meanwhile, the flow of foreign profits repatriated slowed to $85.9 billion in the fourth quarter from an upwardly revised $100.7 billion in the prior period, reflecting a diminishing impact from corporate tax overhaul that went into effect last January.
Earnings repatriation peaked at $294.7 billion in the first quarter immediately after the law took effect but has tailed off each quarter since. Even so, it remains well above pre-tax cut levels.
For the full year, foreign profits brought back to U.S. shores by American companies surged to a record $664.9 billion, more than four times the $155.1 billion logged in 2017 and more than twice the previous record in 2005.