Strong selling hit US stocks on Tuesday as oil and bond yields rose.
The Dow Jones Industrial Average fell 542 points, or 1.5%, before recovering from a deficit of over 600 points, while the S&P 500 and Nasdaq Composite fell 2.6% and 1.8%, respectively, in a choppy session went back.
The 10-year government bond yield rose to 1.87%, adding pressure on equities.
|Me: DJI||DOW JONES AVERAGES||35483.98||+115.51||+0.33%|
|I: COMP||NASDAQ COMPOSITE INDEX||14632.219499||+125.32||+0.86%|
Oil closed above $85 a barrel, an 8-year high after an attack on an oil facility in the UAE capital that killed at least three people.
|USE||UNITED STATES OIL FUND LP||61.41||+0.41||+0.67%|
In the deal news, Microsoft announced plans to buy Activision in a $68.7 billion combination that will give the software giant a head start in the gaming world with titles like Call of Duty and Candy Crush provided, the companies announced on Tuesday.
The deal also made Activision CEO Bobby Kotick the company’s largest single shareholder over $70 million in one day.
ACTIVISION CEO BOBBY KOTICK IS EVEN RICHER AFTER MICROSOFT DEAL
|ATVI||ACTIVISION BLIZZARD INC.||81.88||-0.43||-0.52%|
Electronic Arts, Take-Two and Zenga rose in a declining market as traders weighed the possibility of further mergers and acquisitions.
|SHE||ELECTRONIC ARTS INC.||135.87||+1.96||+1.46%|
|TTWO||TAKE-TWO INTERACTIVE SOFTWARE INC.||163.53||+9.48||+6.16%|
On the earnings side, shares of Goldman Sachs fell after fourth-quarter earnings fell to $10.81 per share, down from analyst estimates tracked by Refinitiv of $11.76 and down from the year-ago period on weaker trading desk results were missed. JPMorgan shares fell in sympathy.
|GS||THE GOLDMAN SACHS GROUP INC.||353.34||-0.79||-0.22%|
|JPM||JPMORGAN CHASE & Co.||149.72||-1.76||-1.16%|
|BLACK||THE CHARLES SCHWAB CORP.||92.31||+0.08||+0.09%|
|BAK||BANK OF AMERICA CORP.||47.28||+0.92||+1.98%|
Charles Schwab also reported results that fell short of analysts’ expectations, with earnings per share of $0.76 versus an estimate of $0.88 while revenue came in below $4.71 billion estimate of $4.79 billion. Bank of America results will be released on Wednesday.
Unilever shares slid after Fitch Ratings warned of a possible downgrade, citing the company’s healthcare-focused strategy, including its proposed acquisition of GlaxoSmithKline’s consumer division.
Separately, 23andMe expanded a joint immuno-oncology program.
|ME||23ANDME HOLDING CO||5.00||+0.16||+3.31%|
Meanwhile, Interactive Brokers and JB Hunt Transport Services will report after the bell.
|IBKR||INTERACTIVE BROKERS GROUP INC.||72.57||+0.64||+0.89%|
|JBHT||JB HUNT TRANSPORT SERVICES INC.||196.31||-4.18||-2.08%|
With 5G rolling out on Wednesday, keep an eye on telecom stocks, including Verizon and AT&T.
|vz||VERIZON COMMUNICATIONS INC.||53.06||-0.38||-0.70%|
In economic data, the National Association of Home Builders’ housing market index slipped one point to 83.
In Asia, the Bank of Japan completed a two-day policy meeting with no major changes. The key interest rate remains at a long-term minus of 0.1%.
Inflation in Japan was less pronounced than in the US and some other countries, despite the central bank raising its inflation forecast for the fiscal year that started in April to 1.1% from 0.9% previously.
Japan’s benchmark Nikkei 225 fell 0.3% to 28,257.25. Australia’s S&P/ASX 200 lost 0.1% to 7,408.80. South Korea’s Kospi fell 0.9% to 2,864.24. Hong Kong’s Hang Seng slipped 0.4% to 24,112.78, while the Shanghai Composite rose 0.8% to 3,569.91.
The Associated Press contributed to this report.