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Wall Street ends sharply lower as Delta variant sparks new lockdown fears

Stock MarketsJul 19, 2021 09:15PM ET
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© 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 U.S. 10-year Treasury yields sliding, pulling rate sensitive banks stock prices with them. The S&P 500 Banks index dropped 3.3%.

"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."

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.

"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 shedding 3.8% and the S&P 1500 Hotel and Restaurant index off 2.7%.

The CBOE Volatility index, a gauge of investor anxiety, gained 4.1 points to 22.50, its highest closing level in two months.

The Dow Jones Industrial Average fell 725.81 points, or 2.09%, to 33,962.04, the S&P 500 lost 68.67 points, or 1.59%, to 4,258.49 and the Nasdaq Composite 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. Energy shares, weighed down by plunging crude prices, fell 3.6%, their worst day since March.

Second-quarter earnings 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:NFLX), Twitter, Johnson & Johnson (NYSE:JNJ), United Airlines and Intel (NASDAQ:INTC), along with a host of industrials from Honeywell (NASDAQ:HON) to Harley-Davidson (NYSE:HOG) are due to post results this week.

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.

International Business Machines (NYSE:IBM) Corp beat quarterly revenue estimates based on the strength of its cloud computing segment. Its shares were up over 3% in after-hours trading.

Zoom Video Communications (NASDAQ:ZM) Inc announced a $14.7 billion all-stock deal to buy cloud-based call center operator Five9 (NASDAQ:FIVN) Inc. The teleconferencing services provider's shares dropped 2.1%, while Five9's jumped 5.9%.

Declining issues outnumbered advancing ones on the NYSE by a 5.21-to-1 ratio; on Nasdaq, a 2.52-to-1 ratio favored decliners.

The S&P 500 posted 12 new 52-week highs and no new lows; the Nasdaq Composite recorded 21 new highs and 252 new lows.

Volume on U.S. exchanges was 12.02 billion shares, compared with the 10.17 billion average over the last 20 trading days.

Wall Street ends sharply lower as Delta variant sparks new lockdown fears
 

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Comments (52)
patrick dan
patrick dan Jul 19, 2021 11:07PM ET
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And yet the Olympics go forward
Todd Gray
Todd Gray Jul 19, 2021 10:15PM ET
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I was watching a recent interview of foocchi, where he yapped on about the delta variant. All throughout the interview he blinked, and that's a major tell wgen someone is lying. Imo, it appeared he was holding back the laughter. I also read that in the UK, the delta variant causes far fewer severe complications than the alpha variant. Fyi.
prabhat ranjan Srivastava
prabhat ranjan Srivastava Jul 19, 2021 9:57PM ET
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Dow is recovering fast. Now what you have to say.
Mike Blade
Mike Blade Jul 19, 2021 9:56PM ET
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all made up variants just to continue to fear monger and bring everything lockdown again.
George Cleancut
George Cleancut Jul 19, 2021 9:51PM ET
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The News lie so much especially in California. Wow they said 700% increase in Covid. Sounds like a horror film from the 70's. 700% increase. That's more than 100% which means the entire California State has Covid and need s hospitalization. Come on with the lies. Just be honest and say hey, we own the Media and the Market we are angry about the Gamesop and AMC short. The 1% Super rich owns and runs everything so they are taking that money back. Even if it means manipulation of the market and news. Also Biden printing trillions everyday like sheesh. Every single mother in America get $300 a month for what??? Giving birth so they can sit there and smoke cigarettes and drink Hennessey while the child eat Now n Laters and sour patch kids for Dinner and Breakfast.
Lo Lo
Lo Lo Jul 19, 2021 9:51PM ET
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classic and very well said. looks like you're eating lunchables today kids
Anthony Cloud
Anthony Cloud Jul 19, 2021 9:25PM ET
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Equity markets are down because everyone reported bs covid news today
JAMES CUNHA
JAMES CUNHA Jul 19, 2021 8:06PM ET
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the story is ridiculous.  If that were the case, then the indices would not have partially recovered leading up to the closing bell.
zen cool
zen cool Jul 19, 2021 7:49PM ET
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Consequence of Lockdown Release; All as expected; Make sense; Fair enough; Market Manipulator just utilizing an (already 1 year and 8 months) excuse again. Any new topic brings up to the market will make better sense
Willaims Graham
Willaims Graham Jul 19, 2021 7:26PM ET
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Why not make living at home while all this is going on
Leo Yuan
Leo Yuan Jul 19, 2021 4:29PM ET
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Why would it make sense to lock down and ruin the economy more cause people refuse to get the vaccine? Let natural selection do it's job imo.
Andrew Allen
Andrew Allen Jul 19, 2021 4:29PM ET
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people who are fully vaccinated are getting covid again too, but I agree people should live and let live
Rawat Surendra
Rawat Surendra Jul 19, 2021 4:16PM ET
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any lockdown news?
Sol Wein
Sol Wein Jul 19, 2021 4:08PM ET
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Corre tiom has nothing to do with Delta and everything to do with Fed tapper tantrum. Except markets still dont understand that the Fed is all bark and no ******** They will do nothing and if anything give the market more stimulus. Buy your gold and silver while still cheap
Dimas Aryotejo
Dimas Aryotejo Jul 19, 2021 2:02PM ET
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I dont think Covid varian delta causes the correction on US Equity, I believe is more to possibility of Tapering in 2022. Because we saw that US 10 Years yield has drop since April 2021, and usually Equity market reaction is delayed compare to Treasuries movement.
Hisham Hassan
Hisham Hassan Jul 19, 2021 1:38PM ET
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Its a time to decrease oil prices to get cheap inventory for winter
Mark Manley
Mark Manley Jul 19, 2021 1:37PM ET
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Not that they're the same, but it took the world 3 generations to fully recover from the Spanish flu, if it takes us two years instead of one, big deal, we're still way ahead
Mark Stallone
Mark Stallone Jul 19, 2021 1:29PM ET
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RELAX. It's all part of Building Back "Better".
Tru Gfu
Tru Gfu Jul 19, 2021 1:29PM ET
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better than free money and no taxes on billionaires
Tru Gfu
Tru Gfu Jul 19, 2021 1:29PM ET
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let's Make America Grafty Again!
Maurice Jones
Maurice Jones Jul 19, 2021 1:27PM ET
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It never ends..cdc said vaccine shots would be effective against the delta variant. Now the world acts like its the first time they heard of this.
Stan Smith
Stan Smith Jul 19, 2021 1:19PM ET
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Sooooo...whens the financial reset then?
Jp Vee
Jp Vee Jul 19, 2021 1:05PM ET
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Hilarious
casual Lee
casualLee Jul 19, 2021 12:58PM ET
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tomorrow news will say markets up on declining Covid cases.
George Mundia
George Mundia Jul 19, 2021 12:58PM ET
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Looks like you so great with analysis. Do you trade stock futures?
David David
David9 Jul 19, 2021 12:58PM ET
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I told you guys.... last time I said we will see a bug spike up after the July 4th weekend... I was right again...
David Bowie
Defcon2 Jul 19, 2021 12:58PM ET
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Are you an editor in the fake news media?
Bob Raborn
Bob Raborn Jul 19, 2021 12:58PM ET
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that is all this is.....a July 4  bump
CT OREN
CT OREN Jul 19, 2021 12:53PM ET
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What a great day! Lets pray the market will melt down. 🙏🙏🙏
Casador Del Oso
Casador Del Oso Jul 19, 2021 12:46PM ET
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over valued stocks and high inflation should be what stifles recovery hopes
Roger Miller
Roger Miller Jul 19, 2021 12:46PM ET
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As it evovles into nothing more than a common cold virus they are still creating all the hype. So much for the science.
Tushar Ingle
Tushar Ingle Jul 19, 2021 12:44PM ET
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this is how handful people collect wealth from millions of retail investors and the place is called stock market.
 
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