Goldman Sachs adds AutoZone to the Conviction List

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S&P 500 marks worst one-day drop in about 3 weeks as Powell fails to quell rate-hike angst

U.S. stocks on Tuesday ended sharply lower, with the S&P 500 index booking its worst single-session drop since early February after the market’s buckled following the first public appearance for Jerome Powell as Federal Reserve chairman, replacing Janet Yellen. The S&P 500 index produced its steepest point and percentage decline, off 35.32 points, or 1.3%, at 2,744.28, since Feb. 8, according to FactSet data. A sell-off in the consumer-discretionary sector, highlighted by a 11% drop in shares of AutoZone Inc. weighed on the broad-market index. The Dow Jones Industrial Average , meanwhile, gave up about 300 points to 25,410.03, off 1.2%, led by a 4.5% tumble in shares of Walt Disney Co. , while the Nasdaq Composite Index sank 1.2% to 7,330.35. Powell conveyed an upbeat picture of the U.S. economy but the market focused on his emphasis on coming rate hikes in 2018 and an end to easy-money policies as the central bank tries to stave off once-dormant inflation. The yield for the 10-year Treasury note , following Powell’s testimony, climbed to 2.90%, while the dollar shot up to gain 0.5% to 90.38, as measured by the ICE U.S. Dollar Index which tracks the buck against a half-dozen other currencies. Bond prices rise as yields fall, with the central bank’s comments sparking selling in government debt as investors dumped Treasurys in anticipation of richer yields in the future in a rising interest-rate environment. Accelerating yields and a stronger dollar, along with fears of advancing inflation, have been part of a recipe that has dragged on markets since the start of February. On Tuesday, Powell said: “we’ve seen continuing strength in the labor market. We’ve seen some data that will, in my case, add some confidence to my view that inflation is moving up to target. We’ve also seen continued strength around the globe, and we’ve seen fiscal policy become more stimulative,” Powell said. In other corporate news, Amazon.com Inc. said it would acquire home-video security company Ring.

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