Dow sinks nearly 800 points on Wall Street fears of Delta variants

doe Monday morning fell nearly 800 points, a decline of 2.2%. S&P 500 fell 1.5% and Nasdaq was less than 1%.

It is turning out to be the worst day for the Dow since a 943-point fall at the end of October.

Investors feared that the delta coronavirus version could threaten the US economic recovery. Shares of companies in sectors that were widely thought to benefit the most from the reopening of the economy are being hit hardest.

airlines American (came)handjob United (UAL) and delta (from) All were down more than 4%. cruise operator CARNIVAL (CCL)handjob Royal Caribbean (RCL) and Norwegian (NCLH) Each fell about 5%.
Energy stocks also fell after falling more than 3% oil prices. beam (CVX) and Exxon Mobil (XOM) were down about 3%. OPEC+ group of nations also agreed a deal over the weekend more oil production A move that could boost supply and drive down crude oil prices.

Long-term bond rates also continued to fall, a sign that fixed income investors are now more concerned about a delta variant-induced economic slowdown than they are about fears of rising inflation.

Yield on the 10-year US Treasury fell below 1.2% for the first time since February.

But as consumer prices continue to rise, some are concerned about a more deadly threat: the possibility that another COVID-19 outbreak could slow the economy, even as inflationary pressures mount. This is a phenomenon known as stagflation.

“If a resurgence in COVID infections slows the economy while consumer prices continue to rise, fear of stagflation is a major concern for investors,” Peter Essele, Commonwealth Financial Network’s head of investment management, said in an email. Will happen.”

Smaller US companies were also being particularly badly hit. Russell 2000 (leak) was down more than 1.5%. The index primarily holds stocks of small-cap firms that generate more of their revenue from the United States than from international markets.
still high numbers illiterate american This means that vaccination rates have not reached the threshold required to stop the spread of COVID-19.
Most Americans who have not been previously infected or received vaccinations A potentially expanding delta version contract, Dr. Scott Gottlieb, commissioner of the US Food and Drug Administration during the Trump administration, told CBS’s “Face the Nation” on Sunday.

Forty-eight states now have new cases rising at least 10% higher than last week, according to data from Johns Hopkins University.

stock fell friday As well as due to conflicting reports about the health of the American consumer. Retail sales rose surprisingly in June, but a measure of consumer sentiment for July showed Americans are growing less confident about the economy.
CNN Business Fear and Greed IndexThe company, which tracks seven parameters of market sentiment, is now showing signs of extreme fear.

Stock is still bullishly up this year and from 2020 lows

But cloud-based call center software company five9 (FIVN) Avoided selling in the market on Monday. Shares rise 4% on news of the video conferencing giant zoom (ZM) was buy it for about $15 billion. Zoom’s stock dropped
covid-19 vaccine manufacturer modern (mRNA), which is destined to be Added to the S&P 500 this weekend, rally also took place, an increase of 5%. biontech (bntx), which makes a vaccine with pfizer (PFE), was even more. pfizer and johnson and johnson (JNJ), makers of the third COVID-19 vaccine, although both were slightly less.

Despite recent volatility, stocks are not far off record highs and are having a solid year.

The Dow is still up more than 10% in 2021 and just 3% below its all-time peak. The S&P 500 is up 13% this year and is down just 3% from its record high.

What’s more, the S&P 500 is up nearly 90% from its COVID-induced bear market lows of March 2020. Some strategists feel that the recent sell-off presents an opportunity.

“We don’t expect a return to the full shutdown in the US, so while losses from the delta version could be significant, we are still in the ‘buy the dip’ camp,” said Bryce Doty, senior portfolio manager at Sit Fixed Income Associates. , said in a report on Monday.

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