Dow Today – Wall Street ends sharply lower as Delta variant sparks new lockdown fears By Reuters
© Reuters. FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri
By Stephen Culp
NEW YORK (Reuters) – A surge in Delta variant infections sparked a broad sell-off on Wall Street on Monday as investors feared renewed COVID-19 shutdowns and a protracted economic recovery.
All three major U.S. stock indexes ended the session sharply lower, with the S&P and the Nasdaq suffering their largest one-day percentage drop since mid-May.
The blue-chip Dow had its worst day in nearly nine months.
The risk-off sentiment also sent sliding, pulling rate sensitive banks stock prices with them.
“Much of it is related to the Delta (variant),” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “There’s some concern too that maybe the economy is not going to open up as quickly as everyone thinks, and the big boom that everyone’s expecting is going to be more of a pop than a boom.”
“We’re woefully off of breakneck economic growth, and judging by the activity we’re seeing we’re overestimating a lot of the economic reports,” Nolte added.
The highly contagious COVID-19 Delta variant, now the dominant strain across the globe, has caused a surge in new infections and deaths, nearly exclusively among unvaccinated people.
For an interactive graphic on worldwide vaccine deployment and availability, click here https://graphics.reuters.com/world-coronavirus-tracker-and-maps/vaccination-rollout-and-access.
“Global availability of the vaccine has been an issue from day one.” Nolte said. “That’s been out there for a long time. This is the latest iteration of that. We still have a long way to go.”
Travel and leisure stocks plunged, with the S&P 1500 Airline index and the S&P 1500 Hotel and Restaurant index losing significantly more ground than the broader market.
The , a gauge of investor anxiety, touched its highest level in two months.
Unofficially, the fell 724.56 points, or 2.09%, to 33,963.29, the lost 68.36 points, or 1.58%, to 4,258.8 and the dropped 152.25 points, or 1.06%, to 14,274.98.
Graphic: S&P 500 drops from record high as new coronavirus cases climb: https://fingfx.thomsonreuters.com/gfx/mkt/xlbpgqqxwpq/Pasted%20image%201626703807725.png
All 11 major sectors in the S&P 500 closed deep in negative territory.
Second-quarter reporting season is under way, with 41 of the companies in the S&P 500 having reported. Of those, 90% have beaten consensus estimates, according to Refinitiv.
Among high-profile names, Netflix (NASDAQ:), Twitter, Johnson & Johnson (NYSE:), United Airlines and Intel (NASDAQ:), along with a host of industrials from Honeywell (NASDAQ:) to Harley-Davidson (NYSE🙂 are due to post results this week.
International Business Machines (NYSE🙂 Corp results are expected shortly.
Analysts now see year-on-year S&P 500 earnings growth of 72% for the April to June period, substantially higher than the 54% annual growth forecast at the beginning of the quarter, per Refinitiv.
Zoom Video Communications (NASDAQ:) Inc announced a $14.7 billion all-stock deal to buy cloud-based call center operator Five9 (NASDAQ:) Inc. The teleconferencing services provider’s shares fell on the news, while Five9’s jumped.
Tech tensions between the United States and China grew more heated with the United States and its allies accusing Beijing of a global hacking campaign while shares of Chinese tech firms listed on foreign exchanges dropped amid fears of regulatory crackdowns.
U.S.-listed shares of China-based ride-hailing app Didi Global extended their decline.