Stocks sink as investors take profits from coronavirus-reopening rally

The rally in U.S. equity markets was on track to come to a screeching halt on Tuesday as investors took profits in some of the high-flying companies that netted a windfall on optimism surrounding the reopening of the U.S. economy.

The Dow Jones Industrial Average fell as many as 421 points, or 1.53 percent, while the S&P 500 and the Nasdaq Composite dropped 1.22 percent and 0.62 percent, respectively. The losses come after the Nasdaq finished at a record high on Monday while the S&P 500 ticked into positive territory for the year.

Looking at stocks, travel-related companies saw profit-taking after scoring big gains in recent sessions. Dow component Boeing was lower after rallying 50 percent over the previous four sessions while American Airlines saw profit-taking following its 81 percent gain since Wednesday.

Hertz Global Holdings, which last month filed for Chapter 11 bankruptcy, was under pressure after shares soared 574 percent over the previous three sessions.

Gilead Sciences’ experimental COVID-19 treatment remdesivir slowed the progression of the disease in monkeys, according to a study published Tuesday by the medical journal Nature.

Embattled oil and natural gas producer Chesapeake Energy is preparing for a bankruptcy filing, according to a Bloomberg report, citing people with knowledge of the matter.

Meanwhile, energy giants Exxon Mobil and Chevron slid after Saudi Arabia announced its extra voluntary production cut would cease at the end of June. West Texas Intermediate crude oil fell 1.89 percent to $37.47 a barrel.


Looking at earnings, Macy’s updated preliminary first-quarter results showed the department store chain lost $652 million in the three months through March, less than the $905 million to $1.1 billion that was previously expected. The company announced late Monday it had secured $4.5 billion of new financing.

Tiffany & Co. swung to a loss in its first quarter, which began in February, as COVID-19 shut stores worldwide. The jeweler said business in China picked up rapidly in May as sales spiked 90 percent.

U.S. Treasurys rallied sharply, dropping the yield on the 10-year note by 7 basis points to 0.814 percent.

Asian markets finished mixed with Japan’s Nikkei sliding 0.38 percent while Hong Kong’s Hang Seng and China’s Shanghai Composite gained 1.13 percent and 0.63 percent, respectively.

In Europe, Germany’s DAX declined 1.84 percent, France’s CAC sank 1.76 percent and Britain’s FTSE lost 2.21 percent