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Roller-Coaster Week Ends With a 460-Point Drop

Roller-Coaster Week Ends With a 460-Point Drop

Hard economic data and market signals alike spooked investors on Friday, sending the Dow to a loss to close out an up-and-down week. IHS Markit's purchasing managers' index indicated that U.S. manufacturing in March hit its slowest pace of growth since April 2017; a similar report in Europe showed a worse-than-expected slowdown there, too. Meanwhile, a run into the perceived safety of bonds pushed the yield on the 10-year Treasury below the yield on the three-month Treasury. (Bond yields fall as buyers push prices higher.) Several economic experts see this so-called yield inversion, which hasn't occurred since 2007, as a reliable predictor of a coming recession. It's no guarantee of a recession, of course, but it still sent worried stock investors to the exits. The industrial average declined 1.8% on Friday to 25,502, for a weekly loss.

Investors have plenty to think about: U.S.-China trade uncertainty, slowing global growth and now possible recession signals. Yes, the stock market remains a stone's throw from all-time highs, but you're not wrong if you're considering defense rather than offense. Thinking long-term? Stocks involved with industrial automation are an interesting two-way play. Companies want to become more efficient, whether it's to outpace their competitors in an upmarket or keep costs lean when the economy isn't as sound. Also, consider seeking out some of the best performers from America's last bear market -- those that still have their defensive characteristics, that is. You can also hunker down in funds. Low-volatility ETFs are an increasingly popular play for investors looking to wait out periods of uncertainty. And if you're worried about serious weakness, these seven funds tend to thrive when most stocks struggle.

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