Investors Shed Stocks on Fears Of a Slowdown; Treasury Securities Favored Amid Unease; Dow Nears 'Correction'
In their intensifying search for havens, investors are bidding up Treasury securities and thumbing their noses at just about everything else, from stocks to municipal bonds to government-sponsored enterprises.</br></br>Reacting to fears of a U.S. economic slowdown, investors dumped stocks on Wednesday. Not even low-risk sectors such as utilities or consumer staples were spared. Then in Asia yesterday, the Shanghai Composite Index dropped 4.4%, leaving it down 16% this month. Hong Kong's Hang Seng Index, which includes a number of China plays, lost an additional 2.3%, bringing its loss for November to 17%.</br></br>The U.S. stock selloff on Wednesday included a 211.10-point drop in the Dow Jones Industrial Average, the third straight drop. At 12799.04, the Dow is now up 2.7% on the year. It also is nearly 10% off its October highs -- the textbook definition of a "correction" that shakes speculative excess out of the market.</br></br>"It's no longer a need for return," said Treasury-bond strategist John Spinello at Jefferies & Co. "It's preserving your capital."</br></br>Stocks have often bounced after such corrections in the past. For now at least, investors seem to be heading somewhere else instead. The price of a benchmark 10-year Treasury note gained about $2.50 for each $1,000 invested Wednesday. That pushed its yield to 4.024%, its lowest level since September 2005. (Yields fall on bonds as their prices rise.)