Stocks fluctuated Tuesday, bond yields retreated and oil prices declined sharply on concerns over a coronavirus resurgence in Europe and questions about data from AstraZeneca’s (AZN) – Get Report COVID-19 vaccine trial.
The Dow Jones Industrial Average was down 17 points, or 0.05%, to 32,714, the S&P 500 rose 0.08% and the tech-heavy Nasdaq dipped 0.02%.
European stocks fell after German Chancellor Angela Merkel instituted a hard lockdown over the Easter break for Europe’s biggest economy.
U.S. crude prices dropped below $60 a barrel following the planned lockdowns in Europe and a firmer U.S. dollar.
AstraZeneca traded lower Tuesday after the U.K. drugmaker may have included outdated information from its COVID-19 vaccine trial, providing an “incomplete” view of the efficacy of the data, according to U.S. health officials.
AstraZeneca said Tuesday its data were based on a pre-specified interim analysis with cutoff of Feb. 17.
“We have reviewed the preliminary assessment of the primary analysis and the results were consistent with the interim analysis, the U.K. drugmaker said in a statement. “We are now completing the validation of the statistical analysis.”
The 10-year U.S. Treasury yield traded at 1.658% Tuesday ahead of the auction this week of $183 billion of notes. A sale of seven-year notes will be closely watched after it stumbled last month, sending yields higher.
The 10-year Treasury yield hit 1.754% last week, a 14-month high.
The narrower yield on the benchmark Treasury has provided some relief to investors worried that a U.S. economic recovery will bring on inflation and make the Federal Reserve less inclined to maintain its loose monetary policy.
“While the rise in bond yields has caused stock market volatility in recent weeks, we believe the uptick in yields is simply part of the reflation trade,” said Greg Marcus, managing director at UBS Private Wealth Management. “All other asset classes have either hit their pre-pandemic levels or exceeded them, with the exception of the 10-year Treasury bond.
“Bond yields are simply returning to pre-pandemic levels, which were already very low by historical comparisons. We expect the broader stock market to be able to cope with higher bond yields,” Marcus said.
Tuesday marks the one-year anniversary of the stock market’s bottom after the coronavirus pandemic sent stocks reeling.
Fed Chairman Jerome Powell said in prepared testimony ahead of his appearance Tuesday before Congress that the U.S. central bank “will continue to provide the economy the support it needs for as long as it takes” since a recovery is “far from complete.”
Powell will join Treasury Secretary Janet Yellen on Tuesday for their first joint appearance before a congressional committee. They will discuss the CARES Act before the House Financial Services Committee at 12 p.m. ET.
GameStop (GME) – Get Report is expected by analysts to report fourth-quarter earnings after the closing bell Tuesday of $1.35 a share on sales of $2.21 billion.
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