No, but it would work much the same as You read the newspapers? Swedish can make questions just by using intonation in the spoken language in a similar way as English. Sometimes we add e.g. så at the beginning to clarify that it is a question, but the same thing happens in English too.
In order to make a real question, the verb needs to go first: Läser du tidningarna?
Swedish doesn't make a difference between "you read" and "you are reading", so du läser translates to both. The word läsa is the infinitive form and hence not applicable here.
"You are reading the newspapers" is accepted here, so if you were marked wrong, you either had a spelling error and didn't notice - or there was a bug.