Wall Street update: Dow plunges over 700 pts as virus surge fans recovery fears
PremiumEconomy-linked value and travel stocks take a hit after a spike in global COVID-19 cases raised fresh concerns about slowing economic growth
Wall Street's main indexes fell sharply over 2% at early trading hours on Monday, with economy-linked value and travel stocks taking a hit after a spike in global COVID-19 cases raised fresh concerns about slowing economic growth.
New infections surged in parts of Asia and England, while U.S. COVID-19 cases soared 70% last week, fueled by the Delta variant.
All 11 S&P sectors fell in early trading, with the so-called value stocks including financial, industrial, materials and energy dropping between 1.8% and 3.7%.
The banking sub-index sank 3.3%, tracking a fall in the benchmark 10-year Treasury yield to mid-February lows.
At 10:17 am, the Dow Jones Industrial Average fell 764.35 points, or 2.20%, to 33,923.50, the S&P 500 lost 83.92 points, or 1.94%, to 4,243.24 and the Nasdaq Composite lost 202.47 points, or 1.38%, to 14,478.90.
Crude prices fell 3% after major oil producing nations agreed to raise production limits. Indonesia has become a new epicenter for the pandemic as outbreaks worsen across Southeast Asia. Many nations have been hit with the more rapidly transmitted delta variant.
The CBOE volatility index, dubbed Wall Street's fear gauge, jumped to a two-month high.
Shares of travel-related companies, which had just begun to climb after suffering steep losses during pandemic-driven lockdowns last year, fell again on Monday. The S&P 500 Airlines index fell 5.4%.
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Cruiseliners Royal Caribbean Group, Carnival Corp and Norwegian Cruise Line dropped more than 6%.
After strong quarterly reports from big banks last week, focus now shifts to tech earnings with companies including IBM , Netflix, Texas Instruments and Intel set to report this week.
Analysts on average expect 72% year-on-year growth in earnings per share for S&P 500 companies, according to IBES estimate data from Refinitiv.
U.S.-listed shares of Alibaba Holding, Baidu and ridesharing app Didi Global declined between 3.6% and 6.6% on renewed fears of anti-monopoly action against major technology firms.
Zoom Video Communications Inc slipped 4.3%.after the teleconferencing services provider announced a $14.7 billion all-stock deal to buy cloud-based call center operator Five9 Inc .
Five9's shares jumped 3.6%.
Declining issues outnumbered advancers 8.80-to-1 on the NYSE and 6.48-to-1 on the Nasdaq.
The S&P index recorded eight new 52-week highs and no new low, while the Nasdaq recorded nine new highs and 189 new lows.
Wall Street's main indexes closed lower on Friday, with investors moving into defensive sectors on concerns that a resurgence in coronavirus cases might delay a strong economic recovery and derail a sharp market rebound from 2020 lows.
The benchmark S&P 500 index has gained nearly 15.2% so far this year, with market participants now looking for strong company forecasts to justify sky-high valuations.
After strong quarterly reports from big banks last week, focus shifts to tech earnings with companies including International Business Machines Corp, Netflix, Texas Instruments and Intel set to report this week.
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