After moving moderately lower early in the session, stocks have seen further downside over the course of the trading day on Tuesday. The major averages have offset the rebound seen in the previous session, hitting their lowest intraday levels in at least a month.<\/p>\n
The major averages have moved roughly sideways in recent trading, stuck firmly in negative territory. The Dow is down 617.74 points or 1.8 percent at 34,518.20, the Nasdaq is down 272.33 points or 1.7 percent at 15,510.51 and the S&P 500 is down 79.46 points or 1.7 percent at 4,575.81.<\/p>\n
The early pullback on Wall Street partly reflected renewed concerns about the new coronavirus<\/span> variant after Moderna’s (MRNA) CEO said in an interview that Covid-19 vaccines are likely to be less effective against Omicron.<\/p>\n Moderna CEO Stephane Bancel said in an interview with the Financial Times that it would take a couple of weeks to determine how much the mutations have affected the efficacy of the vaccines currently available in the market.<\/p>\n “Depending on how much it dropped, we might decide on the one hand to give a higher dose of the current vaccine around the world to protect people,” Bancel said. “Maybe people at very high risk, the immunocompromised, and the elderly should need a fourth dose.”<\/p>\n Regeneron Pharmaceuticals (REGN) has also warned its Covid-19 antibody cocktail and similar drugs could be less effective against the Omicron variant.<\/p>\n Stocks saw further downside after Federal Reserve Jerome Powell suggested during Congressional testimony that the central bank would discuss accelerating the pace at which it reduces its asset purchases during the next monetary policy meeting.<\/p>\n “At this point, the economy<\/span> is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases \u2026 perhaps a few months sooner,” Powell said.<\/p>\n In early November, the Fed announced plans to begin reducing its $120 billion in monthly bond purchases by $15 billion per month.<\/p>\n Powell’s comments suggesting accelerated tapering comes as he told the Senate Banking Committee the recent surge in new Covid-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation. <\/p>\n “Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,” Powell said.<\/p>\n The potential for the intensification in supply-chain disruptions comes as Powell noted pandemic-related supply and demand imbalances have already contributed to notable price increases in some areas. <\/p>\n Sector News<\/p>\n Oil service stocks have shown a substantial move to the downside on the day, dragging the Philadelphia Oil Service Index down by 4.2 percent to its lowest intraday level in three months.<\/p>\n The sell-off by oil service stocks comes amid a steep drop by the price of crude oil, with crude for January delivery plunging $5.38 to $64.57 a barrel.<\/p>\n Significant weakness also remains visible among tobacco stocks, as reflected by the 3.9 percent nosedive by the NYSE Arca Tobacco Index. The index has tumbled to a nearly ten-month intraday low.<\/p>\n A sharp decline by treasury yields is also contributing to considerable weakness among financial stocks, pulling the NYSE Arca Broker\/Dealer Index and the KBW Bank Index down by 3.7 percent and 2.9 percent, respectively.<\/p>\n Natural gas, airline and steel stock have also shown notable moves to the downside, moving lower along with most of the other major sectors.<\/p>\n Other Markets<\/p>\n