Stocks Ended Lower as Yield-curve Inversion Deepened

U.S. stocks closed lower on Tuesday, after a closely watched portion of the Treasury yield curve inverted further and stoked fears of a recession.  Also hopes for a resolution of the U.S.-China trade fight began to fade.  The Dow Jones Industrial Average fell 120.93 points, or 0.47%, to 25,777.90. The S&P 500 was down 9.22 points, or 0.32%, to 2,869.16. The Nasdaq Composite retreated 26.79 points, or 0.34%, to 7,826.95.

Oil futures climbed on Tuesday, following data showing significant output cuts by major oil producers in July and expectations for a drop in weekly U.S. crude supplies. West Texas Intermediate crude for October delivery rose $1.29, or 2.4%, to settle at $54.93 a barrel. October Brent rose 81 cents, or 1.4%, to $59.51 a barrel.

U.S. Treasurys were bid up on the long end of the curve, sending these yields sharply lower. The yields on the 10-year bond and 2-year note inverted again Tuesday, with the spread between these widening to 4.6 basis points around market close.

In Tuesday’s U.S. economic data, the Case-Shiller home price index showed home prices rising nationally at 2.1% in June, down from a 2.4% gain the previous month. Consumer confidence remained elevated, according to the Conference Board’s latest consumer confidence index reading, which fell slightly to 135.1 in August from a revised 135.8 in July.

Autodesk (ADSK), a maker of computer-aided design software, late Tuesday beat Wall Street’s targets for its fiscal second quarter. The company earned an adjusted 65 cents a share on sales of $797 million in the quarter ended July 31. In the year-earlier quarter, Autodesk earned 19 cents a share on sales of $612 million.