By Yasin Ebrahim
Investing.com - Wall Street gave up gains Wednesday, after the rally in tech cooled as investors weighed up optimism over an economic recovery against an ongoing rise in infections across parts of the U.S. that threatened to slow the pace of economic reopening.
The Dow Jones Industrial Average fell 0.65%, or 172 points, the S&P 500 slipped 0.30%, while the Nasdaq Composite was flat.
A rise in infections in some states, including Arizona, Florida, and Texas, put travel and tourism stocks on the backfoot as concerns mount that lawmakers may move to roll back the relaxation of some restrictions.
United Airlines (NASDAQ:UAL), Royal Caribbean Cruises (NYSE:RCL) and Marriott International (NASDAQ:MAR) were among the worst hit.
Energy was among the biggest decliners as renewed concerns about crude demand were exacerbated by a surprise build in weekly crude supplies.
Weekly U.S. crude supplies climbed by 1.2 million barrels last week, confounding expectations for a draw of 152,000 barrels.
In tech, meanwhile, social media companies came under fire on reports that the Department of Justice was looking into reforms that aim to weaken a legal protection that shields them from liability over content posted on their platforms.
Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR) turned negative after paring gains, but Snap (NYSE:SNAP) was up more than 3%.
On the monetary policy front, Federal Reserve Chairman Jerome Powell, in testimony before the House Financial Services Committee, said that the Fed will move away from buying exchange traded funds (ETFs) invested in bonds and instead purchase mostly in individual corporate bonds.
"Over time we’ll gradually move away from ETFs and move to buying bonds,' Powell said, according to CNBC. "It’s a better tool for supporting liquidity and market functioning."
Powell also stressed that Fed's corporate bond-buying will be at the "bottom end" of the possible range because markets are functioning well.