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Stocks and oil slide as Delta's spread muddies economic picture

Stock MarketsAug 17, 2021 05:11PM ET
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2/2 © Reuters. FILE PHOTO: A man watches an electric board showing Nikkei index outside a brokerage at a business district in Tokyo, Japan, June 21, 2021. REUTERS/Kim Kyung-Hoon 2/2

By Pete Schroeder

WASHINGTON (Reuters) - Major stock indexes slid and oil posted its fourth straight day of declines as investors grappled with mixed economic data and considered the economic impact of the ongoing spread of the Delta coronavirus variant.

Wall Street closed down sharply on Tuesday, with the most significant declines seen in mega-cap technology-related and consumer discretionary stocks as investors scaled down their risk appetite.

The Dow Jones Industrial Average fell 0.79%, snapping a five-day winning streak. The S&P 500 lost 0.71% after posting a new record high on Monday, and the Nasdaq Composite dropped 0.93%.

The MSCI world equity index, which tracks shares in 45 nations, fell 0.77%.

The prospect of diminished travel demand or new pandemic lockdowns weighed on oil, exacerbated by a belief in OPEC and among its allies that the market does not need more supply.

Brent crude ended the session down 48 cents, or 0.7%, at $69.03 per barrel, while U.S. West Intermediate crude (WTI) settled down 70 cents, or 1% lower at $66.59 a barrel.

Markets opened Tuesday morning on a pessimistic note after the Commerce Department reported U.S. retail sales fell 1.1% in July, well below economist expectations. However, that picture was made murkier by separate data that showed output at U.S. factories surged in July.

Those numbers cast new doubt on whether the United States will get a grip on the pandemic to get the world's largest economy back on track, particularly as cases rise globally with the spread of the Delta variant of the coronavirus.

"It is possible that rising COVID cases are beginning to dent consumer sentiment, but the fact that restaurant spending increased during the month suggests that such concerns are modest. Retail sales are not adjusted for inflation, and it may be that recent price growth is starting to affect sales volume," said Curt Long, chief economist and vice president at the National Association of Federal Credit Unions.

Fed Chair Jerome Powell said on Tuesday it remained unclear whether the Delta spread will have a noticeable impact on the economy, adding that many companies have been able to adapt.

Beyond COVID concerns, political turmoil in Afghanistan added to safe-haven demand, boosting the U.S. dollar to its second straight day of gains. The U.S. dollar index rose 0.55% to 93.130.

U.S. Treasury yields were largely unchanged in choppy trading on Tuesday, as investors sorted through a muddy economic picture. Benchmark 10-year note yields were last at 1.258%, little changed on the day, after earlier falling as low as 1.217%.

Going forward, the U.S. Federal Reserve will give investors fresh fodder to consider on Wednesday when it releases minutes from its July policy-setting meeting. Markets will be looking for indications of how quickly the Fed will move to step back its unprecedented stimulus as it eyes job gains and inflation.

Boston Federal Reserve Bank President Eric Rosengren said on Monday the Fed could begin reducing monthly asset purchases in September if it sees one more strong jobs report.

Gold prices eased on Tuesday after several days of gains, with spot gold dropping 0.14% to $1,784.75 an ounce. U.S. gold futures settled 0.1% lower at $1,787.80 per ounce.

Stocks and oil slide as Delta's spread muddies economic picture
 

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Comments (23)
Darryl Allen
Darryl Allen Aug 18, 2021 3:31AM ET
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muh delta variant. nobody cares.
prabhat ranjan Srivastava
prabhat ranjan Srivastava Aug 17, 2021 9:30PM ET
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If stocks starts moving up in a day or two what story you r going to cook up.
Options Trader
Options Trader Aug 17, 2021 7:41PM ET
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once the MMs have loaded up, the Delta variant will magically go away.
Franco Dominguez
Franco Dominguez Aug 17, 2021 2:36PM ET
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and the elder powell said in a university speech that new generation will be mature. He must focus in his job maintain inflation at 2%
Kelly Mayer
Kelly Mayer Aug 17, 2021 1:49PM ET
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We are in a bear market, disguised as indexes going up. Only a handful os stocks are going up. Manipulation extreme.
John Avenetti
John Avenetti Aug 17, 2021 1:14PM ET
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Delta spread my rear end. this is the biggest shan ever perpetrated in world history. its a flu like we have ever year but when you control the media you control people's minds.
Mduduzi Charls
Mduduzi Charls Aug 17, 2021 1:14PM ET
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Very True my Guy
Ryan Miskowiec
Ryan Miskowiec Aug 17, 2021 1:14PM ET
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Well, it's all fun an games till you get it. I'm a conservative guy, my dad as well. He contracted delta and nearly died last week.
Matt Novakovich
Matt Novakovich Aug 17, 2021 1:14PM ET
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95 year old, fat smokers die of the flu all of the time
Mike Wellons
Mike Wellons Aug 17, 2021 1:14PM ET
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Call it a flu if you want, a flu thats killed 615k people in the US, and currently has hospital ICU's maxed out in the southern states. What difference does it make if you call it a flu or anything else? smh
Jeremy Stutzel
Jeremy Stutzel Aug 17, 2021 1:14PM ET
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People deny all over the world but nothing like here in the U.S. US troops have made the biggest sacrifices for our freedoms; however, ordinary US citizens refuse to follow those examples.
Anita Mangina xe they
Anita Mangina xe they Aug 17, 2021 1:00PM ET
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As a millennial with a doctorate in gender studies, I am totally going to boycott Delta and only fly American Airlines. This Delta thing everybody is talking about is totally uncool, but I guess it is cool that I do not have to pay rent anymore. Anyway, better head back to Twitter to give hearts to AOC posts, she is like so stunning and brave fighting capitalism, and I own like 7 of her shirts that cost like $60 a piece.
Josh Davis
Josh Davis Aug 17, 2021 1:00PM ET
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No one will see the genius in this post bravo.
John Avenetti
John Avenetti Aug 17, 2021 1:00PM ET
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Josh Davis seems 4 have.
davis clark
davis clark Aug 17, 2021 1:00PM ET
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Ha!!!! Bravo!!!
Semih Unalan
Semih Unalan Aug 17, 2021 12:55PM ET
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0 brains. Chickens are bound to get slaughtered.
elad maderer
elad maderer Aug 17, 2021 12:41PM ET
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Don't worry, stocks won't crash.5 days up, 1 day down.Only up from here for the rest of the decade.
Ricardo Diogo
Rcd72 Aug 17, 2021 12:35PM ET
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Eric Rosenberg said more ... he said FED assets purchase program is useless to the economy... it is even damaging because only bring inflation!
NDUBUISI Nweze
NDUBUISI Nweze Aug 17, 2021 12:34PM ET
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global war..
Nico Las
Nico Las Aug 17, 2021 12:21PM ET
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The delta variant does not exist, the pandemic is history. I will not sell.
Fong SH
Fong SH Aug 17, 2021 12:04PM ET
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It's a tit for tat game between two superpowers. Well, the higher you climb, the harder you fall. In history, USA have been poking everywhere & today she finally met her match opponent. In the 80s financial markets has never been mixed with politics, all that have changed since millennium. It's about monetary muscles and face values. Eventually, the man on the streets suffers. Take care everyone, when outdoors, wear a mask, stay safe and healthy.
Jouni Matero
Jouni Aug 17, 2021 11:58AM ET
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Funny. Retail sales were much worse than expected, but some bankers twist it by saying "retail sales didn't move to direction we wanted but were still some what expected". LOL. Retail sales were much worse than consensus EXPECTED, analysts try everything to twist it sound better than it is.
edgar blumenthal
edgar blumenthal Aug 17, 2021 11:37AM ET
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WallStreet is now convinced too, that USA is now a -2 position world country. Even embarrassing its NATO partners. Hurting its prestige and continuity outlook.
freedom byforce
freedom byforce Aug 17, 2021 11:03AM ET
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how long can they keep this delta bs up
John Avenetti
John Avenetti Aug 17, 2021 11:03AM ET
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as long ad they want. Epsilon is next
Steffen vdm
Steffen vdm Aug 17, 2021 11:03AM ET
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Zeta, Lambda, Kappa... They can play this game for a very long time
cedrik marchand
cedrik marchand Aug 17, 2021 9:54AM ET
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ahahah ****china
Gábor Kardos
Gábor Kardos Aug 17, 2021 4:53AM ET
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regulations out is good. means companies know what to expect. a few more days and we are at bottom. start buying
TK Zaokelv
TK Zaokelv Aug 17, 2021 2:07AM ET
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waiting for the new trends whole heartedly the must be here to make one a firty 🤑
Kaveh Sun
Kaveh Sun Aug 17, 2021 2:07AM ET
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Surprise Reuters had the correct picture. Red means good/up in asia.
Mark Dz
Mark Dz Aug 17, 2021 1:40AM ET
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Biden didn't make the deal to pull out of Afghanistan, trump did. However, he did agree to cease providing intelligence and air support to the afgan. military. This reckless decision created a "Bay of pigs" scinerio, which is his responsibility.
edgar blumenthal
edgar blumenthal Aug 17, 2021 1:40AM ET
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No Trump devised a plan with mutual commitments, leaving US airforce strikes intact, as insurance. Joe unilaterally called for the movers, overnight. Even embarrassing other NATO partners [or what is left of them]. If I was a strategic chip manufacturing industry, like Taiwan or even The Netherlands [ASML], I would be worried,,,
John Avenetti
John Avenetti Aug 17, 2021 1:40AM ET
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wrong
William Smith
William Smith Aug 17, 2021 12:29AM ET
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Worldometer shows cases dropping in most of the world daily.
Show previous replies (2)
darren marshall
darren marshall Aug 17, 2021 12:29AM ET
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cases are dropping especially in the uk don't believe everything you read.
Josh Davis
Josh Davis Aug 17, 2021 12:29AM ET
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Joel Schwartz you mean like the cdc doubling the numbers ? On purpose. Stop being stupid
freedom byforce
freedom byforce Aug 17, 2021 12:29AM ET
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Texas has no delta problem I'm here in Texas and hospitals are fine. I'm about to head to one to get an infection drained. my county has a 4 in 100,000 infection rate. we never wore a mask. hardly anyone has vaccine, they sent the national guard here to test us. all you scared sissies are a laughing stock
freedom byforce
freedom byforce Aug 17, 2021 12:29AM ET
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Joel Schwartz Texas has no delta problem I'm here in Texas and hospitals are fine. I'm about to head to one to get an infection drained. my county has a 4 in 100,000 infection rate. we never wore a mask. hardly anyone has vaccine, they sent the national guard here to test us. all you scared sissies are a laughing stock
John Avenetti
John Avenetti Aug 17, 2021 12:29AM ET
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says CNN. 🤪🤣🤣🤣
Tyrone Jackson
Tyrone Jackson Aug 17, 2021 12:20AM ET
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Biden’s legacy- leaving 10’s of thousands women and children to a life of despair under the taliban. And 10’s of hundreds a certain death. What a toool.
Tony Huynh
Tony Huynh Aug 17, 2021 12:20AM ET
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so you want the US to stay involved in Afhan for another 20 years? And isn't Trump the ones who issued the withdrawal order first, you guys were raising him last year for that too lol
Joel Schwartz
Joel Schwartz Aug 17, 2021 12:20AM ET
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Sunken cost fallacy. Afghanistan was a lost cause before we were there and it will be a lost cause after we leave. Change needs to come from within, otherwise it’s just imperialism by another name.
Ron Cole
Ron Cole Aug 17, 2021 12:20AM ET
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There's a right way and wrong way to do anything. Biden can't do anything right! We are in so much trouble in his administration so many ways we're losing count. The man is an abject loser and an embarrassment to the US.
 
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