Wall Street plunges on recession fears

Wall Street’s main indexes slumped on Monday as risk appetite among investors dropped on fears of a US recession following weak economic data last week, sending tremors across global markets. Market worries eased a bit as the day progressed and stocks pared losses after data showed US services sector activity in July rebounded from a four-year low amid a rise in orders and employment. Traders attributed some weakness in stocks also to unwinding of sharp positions of carry trades, where investors borrow money from economies with low interest rates such as Japan or Switzerland to fund their bets in high-yielding assets elsewhere. The so-called Magnificent Seven group of stocks - the main driver for the indexes hitting record highs this year - were set to lose a combined $650 billion in market value.