By Geoffrey Smith
Investing.com -- U.S. stock markets opened lower again on Tuesday as hawkish comments from Federal Reserve officials, together with increasing signs of a wave of Covid-related absenteeism across the U.S. economy, kept a firm lid on risk appetite.
By 9:45 AM ET (1445 GMT), the Dow Jones Industrial Average was down 243 points, or 0.7% at 35,826 points. The S&P 500 was down 0.6% and the Nasdaq Composite was down 0.5%.
Earlier gains in the premarket session quickly reversed after Kansas City Fed President Esther George, a noted hawk on the policymaking committee, said that she was comfortable with the idea of the Fed selling its bond holdings back into the market faster than it did after the last quantitative easing program ended.
"My own preference would be to opt for running down the balance sheet earlier rather than later as we plot a path for removing monetary accommodation," George said in prepared remarks to a virtual event to Central Exchange, a women's organization.
George's comments were a setback to hopes that the Fed may go easy on removing stimulus due to a likely soft patch for growth in the first couple of months caused by the Omicron-variant of Covid-19. The new dominant variant has caused record numbers of infections across the U.S., and resultant absences from work.
The U,S. reported 1.42 million new cases on Monday, over four times as many as the previous daily peak last September. And while the new variant appears to be less virulent than Delta and the original Wuhan variants which account for nearly all of the 838,000 U.S. Covid deaths in the last two years, the number of people in intensive care is still at 75% of its previous peak, with no sight of the current wave cresting yet.
The market subsequently pared losses but was still mostly lower as Federal Reserve Chair Jerome Powell sat down in the Senate Banking Committee for the confirmation hearing to his second term. Powell said in prepared remarks that he was determined not to let inflation become "entrenched" - a nod to the sharp rise in inflation expectations in the second half of last year that were reflected in consumer sentiment surveys and in forward inflation-linked swap contracts.
Among individual movers, Tesla (NASDAQ:TSLA) stock regained some momentum after data showing its best ever month for deliveries in China, which leads the world in absolute numbers of Electric Vehicles registered. However, old-world mobility was also strong, with Exxon Mobil (NYSE:XOM) stock rising 1.3% to its highest since the start of the pandemic two years ago. Oil prices have risen this week on concerns that OPEC and its allies will be unable to deliver the additional volumes of oil they have promised, creating space for big shale players like Exxon to fill a vaccum in the market at some of the highest crude prices in the last five years.
Elsewhere, Vir Biotechnology (NASDAQ:VIR) stock rose 4.4% after U.S. health authorities agreed to buy another 600,000 doses of the antibody-based Covid-19 treatment that the U.S. drugmaker manufacturers with British partner GlaxoSmithKline (NYSE:GSK).