From the Wall Street Journal: U.S. stocks fell to fresh lows for the session as investors staged a flight from risk in global markets, sending 10-year Treasury yields to 1940s levels, after a gloomy outlook by the Federal Reserve renewed fears of a global economic slowdown.
In a move some investors have called "Operation Twist," the Fed announced Wednesday it would increase the share of longer-dated Treasurys within its portfolio by $400 billion by June 2012, while selling shorter-term paper. But the planned effort was overshadowed in the minds of many investors by a gloomy statement from the central bank, which noted "significant downside risks" to the global economy. The Fed also noted "strains" in global financial markets, widely interpreted as a reference to Europe's sovereign-debt crisis.
A weak reading on manufacturing in China also contributed to slowdown fears. Adding to the grim mood was a lack of appreciable progress in containing Europe's debt crisis, which has weighed on markets for months.
"They're selling literally everything," said Alan Valdes, director of floor trading at DME Securities. "It's the realization that things aren't getting better that has traders concerned. They're selling gold, they're selling copper, they're selling everything..."
Read the rest at http://online.wsj.com/article/SB10001424053111903703604576586271066472228.html?mod=WSJ_hp_LEFTTopStories
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