It was supposed to be a quiet day—no major economic indicators were out in the U.S. But the World Bank announced that it believed the world recession will be deeper than previously forecast. This sent equities and commodities into a tailspin while flight to safety boosted Treasuries significantly. The Dow and S&P dropped 2.4 percent and 3.1 percent, respectively. Techs, small caps, and mid-caps pulled down the overall equity market even more sharply as the Wilshire 5000 declined 3.2 percent for the day.
Treasury yields fell with the 2-year note and 10-year note decreasing 7 basis points and 9 basis points to 1.14 percent and 3.69 percent, respectively. The dollar generally firmed, up about a cent against the euro at 1.3861 and up about 1-1/2 cents against the pound sterling at 1.6347. Commodities fell sharply with oil ending at $66.93, down $2.62.