By Geoffrey Smith
Investing.com -- U.S. stock markets opened moderately higher on Tuesday, in a cautious recovery from Monday's sell-off, which saw the Dow Jones index fall over 4% at one point.
Trading was relatively subdued ahead of two days of testimony in Congress by Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin. Powell had already repeated in prepublished prepared remarks his admonition to Congress to provide more stimulus to the economy. However, that seems less likely against a backdrop of a culture war between the two main parties over the need to fill the deceased Ruth Bader Ginsburg's seat on the Supreme Court.
By 10:10 AM ET (1410 GMT), the Dow Jones Industrial Average was up 7 points, or less than 0.1%, at 27,155. The S&P 500 was up 0.3% and the Nasdaq Composite was up 0.5%.
The Nasdaq had outperformed on Monday as investors sought out tech stocks as their best defense against a renewed fall in economic activity driven by Covid-19 lockdowns. However, it lost its early momentum in premarket as Tesla (NASDAQ:TSLA) stock sold off 4.8% in response to comments overnight by CEO Elon Musk.
Musk had warned via Twitter that whatever the company unveils at its 'Battery Day' event on Tuesday wouldn't enter into mass production until 2022 at the earliest, and so doesn't solve the company's looming supply crunch with regard to battery cells.
Leading the losers was imaging company Nano X Imaging (NASDAQ:NNOX) stock, which fell 16.4% after short-selling firm Muddy Waters (NYSE:WAT) Research published a report into the company that concluded that it "has no real product to sell other than its stock." It's not the first short report published against Nano-X, which has now lost nearly two-thirds of its value in the last 11 days.
Peloton Interactive (NASDAQ:PTON) stock also fell another 7.7% while Illumina stock (NASDAQ:ILMN) fell another 1.1% on concerns about the cost of its buyout of Grail, which was announced on Monday.
However, other stocks that have profited from the dislocation of activity due to the pandemic continued to thrive on speculation of more and longer lockdowns as winter approaches in the northern hemisphere. Zoom Video (NASDAQ:ZM) stock rose another 1.7% to a new all-time high, while Amazon (NASDAQ:AMZN) stock rose 2.5%.
There was a modest degree of support from a Richmond Fed survey that showed a modest improvement in both manufacturing and services activity in September, while existing home sales also stayed strong, rising to an 11-year high of 6.00 million in August.