Dow fails to hold above 200-day moving average -- a key line in the sand for the blue-chip gauge

The Dow Jones Industrial Average was fighting to maintain trade above its closely watched long-term trend line as stocks declined sharply in Wednesday afternoon trade. The Dow was down 760 points, or 2.9%, at 25,523, falling below its 200-day moving average at 25,585.34, according to FactSet data. Technical analysts view moving averages as gauges of bullish and bearish momentum in an asset, with a breach of the 200-day representing a shift in the long-term outlook for an asset. The Dow hasn't closed below its long-term average since early June. Meanwhile, the broader market losses were gathering steam, with the S&P 500 index and the Nasdaq Composite Index spiraling lower in afternoon action, all down by at least 2.7%. The spark for the downbeat action on Wednesday was a Treasury market that was sending a recessionary signal, with the two-year Treasury yield and the 10-year Treasury rate inverting--meaning the short-term debt yielded more than the longer-term note---usually signaling that a recession was in the offing in the next several months. Meanwhile, the U.S. 30-year Treasury bond fell to a record low, reflecting dimming expectations for the long-term economic outlook.

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