Stocks sink as coronavirus European lockdowns rise, Powell and Yellen assess economy

WTI oil tanked amid concerns of a third wave of COVID-19 infections in Europe

U.S. equity markets fell Tuesday, as selling accelerated in the final hour of trading, amid renewed concerns about the pace of the global recovery as European countries imposed new COVID-19 lockdowns and as Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen testified about the U.S. government’s COVID-19 relief efforts.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 33957.97 -119.66 -0.35%
SP500 S&P 500 4154.43 -8.83 -0.21%
I:COMP NASDAQ COMPOSITE INDEX 13908.619884 -6.15 -0.04%

The Dow Jones Industrial Average fell 308 points, or 0.94%, while the S&P 500 and the Nasdaq Composite lost 0.77% and 1.12%, respectively.

Materials and industrials paced declines as these sectors are closely linked to an economic rebound.

Ticker Security Last Change Change %
XLB MATERIALS SELECT SECTOR SPDR ETF 81.99 -0.30 -0.36%
XLI INDUSTRIAL SELECT SECTOR SPDR ETF 100.32 -0.41 -0.41%

Germany announced Tuesday that it is extending COVID-19 restrictions through April 18 due to new variants of the disease. Three days earlier, France imposed a month-long lockdown for nearly a third of the country.

On Capitol Hill Powell and Yellen told the House Financial Services Committee that the U.S. economy is recovering, but is still a work in progress. Yellen faced questions over the size of the $1.9 trillion relief package while Powell had to answer for the Fed’s recent decision to end emergency capital relief for banks. Both will appear before the Senate Banking Committee again on Wednesday.

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Ticker Security Last Change Change %
JPM JPMORGAN CHASE & CO. 150.80 -1.79 -1.17%
GS THE GOLDMAN SACHS GROUP, INC. 337.81 -5.56 -1.62%
BAC BANK OF AMERICA CORP. 38.32 -0.91 -2.32%

In stocks, financials were weaker as longer-dated U.S. Treasurys rallied, flattening the yield curve after a transcript of Powell's testimony expressed caution on the state of the economic recovery. The benchmark 10-year yield was lower by 4.55 basis points at 1.637%, down from last week’s high near 1.75%.

Ticker Security Last Change Change %
XOM EXXON MOBIL CORP. 55.46 -1.04 -1.84%
CVX CHEVRON CORP. 101.89 -1.44 -1.39%

Meanwhile, oil majors Chevron Corp. and ExxonMobil Corp. finished lower as West Texas Intermediate crude oil tanked $3.80 to $57.76 per barrel as the new lockdowns in Europe mean weaker energy demand. Travel-related names were also under pressure with American Airlines Group Inc., Carnival Corp. and TripAdvisor Inc. all seeing losses.

Ticker Security Last Change Change %
AAL AMERICAN AIRLINES GROUP, INC. 20.55 -0.99 -4.62%
CCL CARNIVAL CORP. 25.82 -0.98 -3.68%
TRIP TRIPADVISOR, INC. 49.50 -3.51 -6.62%

In mergers and acquisitions, the bidding war for laser maker Coherent Inc. continued with optical fiber firm Lumentum Holdings Inc. raising its offer to approximately $7 billion, or $230 cash and 0.6724 Lumentum shares for each Coherent share owned. II-VI Inc. last week offered $7 billion for Coherent.

Ticker Security Last Change Change %
COHR COHERENT 265.99 +0.42 +0.16%
LITE LUMENTUM HOLDINGS 93.48 +0.96 +1.04%

Elsewhere, GameStop Corp. earnings were due out after the closing bell. The report was the first since the Reddit-trading frenzy that began at the end of January.

Ticker Security Last Change Change %
GME GAMESTOP 160.70 -3.78 -2.30%

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Overseas markets were mixed.

France’s CAC 40 slipped 0.39% and Britain’s FTSE 100 lost 0.4% while Germany’s DAX 30 edged up 0.03%.

In Asia, Hong Kong’s Hang Seng Index fell 1.34%, China’s Shanghai Composite index declined 0.93% and Japan’s Nikkei 225 slid 0.61%.