By Geoffrey Smith
Investing.com -- U.S. stock markets opened weakly on Monday and sank through the morning session, on fears that a third wave of the coronavirus pandemic will push back the day when economic life can get back to normal. Failure by politicians in Washington to make any progress in passing a support package to bridge the gap until that day has also weighed on sentiment.
By 11:13 AM ET (1513 GMT), the Dow Jones Industrial Average was down 631 points, or 2.2%. The S&P 500 index was down 1.8% and the Nasdaq Composite was down 1.5%. All three indexes have now been trending downward for the last two weeks.
The U.S. is clearly experiencing a third wave of the pandemic with just a week to go before the election. Hospitalization rates have risen by around half over the last month to their highest since August, while the seven-day moving average for deaths has been trending up for nearly two weeks. Whether the economy has adapted enough in the last six months to ride out the new wave seems open to question, with initial jobless claims still running at nearly 800,000 a week.
Airline and cruise stocks were conspicuous early fallers, with United Airlines (NASDAQ:UAL) stock falling 3.8% and American Airlines (NASDAQ:AAL) stock falling 3.3%
Various software stocks came under pressure after German enterprise planning giant SAP slashed its short- and medium-term outlook for profitability, as the pandemic weighs on business spending and accelerates transition to the Cloud - an area where SAP's margins are lower than in its legacy business. SAP (NYSE:SAP) ADRs fell over 20%, while Salesforce (NYSE:CRM) stock, exposed to many of the same factors, fell 1.4%.
Elsewhere, Dunkin Brands Group (NASDAQ:DNKN) stock rose 14.8% to a new all-time high after it said it was in early talks to be acquired by Private Equity group Inspire Brands, which already owns the Arby's and Buffalo Wild Wings restaurant franchises.
The moves came on a day when the biggest deal in world stock markets was taking place far away, as Chinese financial services giant Ant Group priced its initial public offering to raise some $34 billion on the Hong Kong and Shanghai stock exchanges.
The IPO is a reminder of the growing distance between U.S. and Chinese capital markets: Ant's founder, Jack Ma, had listed his Alibaba (NYSE:BABA) group on the New York Stock Exchange only six years earlier, but such moves have been complicated by U.S. regulatory moves, as part of a general move to tighten Chinese access to U.S. capital and technical expertise.
Overnight, China had announced sanctions against Boeing and Lockheed Martin in response to a U.S. deal to sell arms to Taiwan earlier this year. Boeing (NYSE:BA) stock fell 2.6%, while Lockheed (NYSE:LMT) stock fell 2.6% to a three-month low.