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Stocks Sell-Off to Start Holiday-Shortened Week

The Dow Jones, S&P 500 and Nasdaq Composite Index declined sharply on Tuesday.

The Dow and broader U.S. stock market declined to start the holiday-shortened week, as investors turned their attention to fourth-quarter earnings against a backdrop of negative headlines concerning Covid-19.

Wall Street’s major indices were lower at the close, with the Dow Jones Industrial Average (DIA) falling 542.42 points, or 1.5%, to 35,368.47.

The broad S&P 500 Index (SPY) of large-cap stocks declined 1.8% to settle at 4,577.12. Most sectors finished in negative territory.

Meanwhile, the technology-focused Nasdaq Composite Index (QQQ) plunged 2.6% to close at 14,506.90.

A measure of implied volatility known as the CBOE VIX (VXX) rose sharply on Tuesday. The so-called “investor fear index” reached an intraday high of 23.03 on a scale of 1-100, where 20 represents the historical average. It would eventually settle up 18.6% at 22.75.

In commodities, oil prices rose on Tuesday, as U.S. West Texas Intermediate advanced $2.06, or 2.5%, to $85.88 a barrel on the New York Mercantile Exchange. Brent, the international futures contract, climbed $1.49, or 1.7%, to $87.97 a barrel.

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In precious metals, gold prices were little changed, as the February futures contract fell $1.80, or 0.1%, to $1,814.70 a troy ounce on the Comex division of the New York Mercantile Exchange. Silver futures rose 70 cents, or 3%, to trade at $23.62 a troy ounce.

The Final Word: In economic data, the National Association of Home Builders’ housing market index dipped slightly in January, falling from 84 to 83. The New York Empire State manufacturing index also fell to -0.7 in January from a reading of 31 the previous month.