dpa-AFX/GNA – Stocks showed a lack of direction throughout much of the trading day on Tuesday but showed a notable move to the downside in the latter part of the session
The major averages all slid firmly into negative territory. The major averages ended the session near their worst levels of the day.
The Dow slumped 308.05 points or 0.9 percent to 32,423.15, the Nasdaq tumbled 149.85 points or 1.1 percent to 13,227.70 and the S&P 500 slid 30.07 points or 0.8 percent to 3,910.52.
The weakness that emerged on Wall Street partly reflected concerns about extended coronavirus lockdowns in Europe amid worries a new wave of infections.
German leaders agreed to extend the country’s lockdown until April 18, raising concerns about demand from Europe’s largest economy.
The news contributed to a steep drop by the price of crude oil, with crude for May delivery plunging 3.80 dollars to 57.76 dollars a barrel.
Traders also kept an eye on Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen’s virtual testimony before the House Financial Services Committee.
In prepared remarks, Powell reiterated the Fed’s recent assessment that indicators of economic activity and employment have turned up recently. Powell noted that the economic recovery is “far from complete,” however, and stressed the Fed will continue to provide the support that the economy needs for “as long as it takes.”
On the U.S. economic front, a report released by the Commerce Department showed a nosedive by U.S. new home sales in the month of February. The Commerce Department said new home sales plummeted by 18.2 per cent to an annual rate of 775,000 in February after jumping by 3.2 per cent to an upwardly revised rate of 948,000 in January. Economists had expected new home sales to tumble by 5.2 per cent to a rate of 875,000 from the 923,000 originally reported for the previous month.
With the much bigger than expected decrease, new home sales plunged to their lowest rate since hitting 698,000 last May.
Sector NewsOil service stocks moved sharply lower along with the price of crude oil, dragging the Philadelphia Oil Service Index down by 6.2 per cent to its lowest closing level in a month.
Substantial weakness was also visible among airline stocks, as reflected by the 4.1-per-cent nosedive by the NYSE Arca Airline Index.
Biotechnology stocks also saw considerable weakness on the day, resulting in a 3.7-per-cent slump by the NYSE Arca Biotechnology Index. Ionis Pharmaceuticals (IONS) helped the sector lower after announcing its partner, Roche, has decided to discontinue dosing in the Phase III study of tominersen in manifest Huntington’s disease.
Steel, computer hardware and gold stocks also moved sharply lower over the course of the session, while utilities stocks were among the few groups to buck the downtrend.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index slid by 0.6 per cent, while China’s Shanghai Composite Index slumped by 0.9 per cent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index closed just above the unchanged line, the French CAC 40 Index and the UK’s FTSE 100 Index both fell by 0.4 per cent.
In the bond market, treasuries extended the notable move to the upside seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 4.6 basis points to 1.638 per cent.
A report on durable goods may attract some attention on Wednesday along with Powell and Yellen’s second day of Congressional testimony.