Stock market sinking as COVID fears grow around the world

Business

AL.com 19 July, 2021 - 10:04am 6 views

Stocks are falling sharply Monday as worries sweep from Wall Street to Sydney that the worsening pandemic in hotspots around the world will derail what’s been a strong economic recovery.

The S&P 500 was 1.9% lower in morning trading, after setting a record high just a week earlier. In another sign of worry, the yield on the 10-year Treasury dropped close to its lowest level in five months. It sank below 1.20% as investors scrambled for safer places to put their money.

The Dow Jones Industrial Average was down 769 points, or 2.2%, at 33,918, as of 10:17 a.m. Eastern time. The Nasdaq composite was 1.7% lower.

Airlines, hotels and stocks of other companies that would get hurt the most by potential COVID-19 restrictions were taking some of the heaviest losses, similar to the early days of the pandemic in February and March 2020. Mall owner Simon Property Group tumbled 7.8%, and cruise operator Carnival lost 7.5%.

The drop also circled the world, with several European markets down nearly 3%, on worries new, more infectious variants of the virus are dragging particularly hard on economies where vaccination rates are low. The price of benchmark U.S. crude, meanwhile, sank more than 5% after OPEC and allied nations agreed on Sunday to eventually allow for higher oil production this year.

Experts are saying Indonesia has become a new epicenter for the pandemic as outbreaks worsen across Southeast Asia. Meanwhile, some athletes have tested positive for COVID at Tokyo’s Olympic Village, with the Games due to open Friday.

“The more transmissible delta variant is delaying the recovery for the ASEAN economies and pushing them further into the doldrums,” said Venkateswaran Lavanya, at Mizuho Bank in Singapore.

Even though vaccination rates are higher in the United States and some other developed economies, the tightly connected global economy means hits anywhere can quickly affect others on the other side of the world.

In Japan, the world’s third-largest economy, the vaccine rollout came later than in other developed nations and has stagnated lately. Japan is totally dependent so far on imported vaccines, and just one in five Japanese have been fully vaccinated.

Financial markets have been showing signs of increased concerns for a while, but the U.S. stock market had remained largely resilient. The S&P 500 has had just two down weeks in the last eight.

The bond market has been louder in its warnings, though. The yield on the 10-year Treasury tends to move with expectations for economic growth and for inflation, and it has been sinking from a perch of roughly 1.75% in March. It was at 1.19% Monday morning, down from 1.29% late Friday.

Analysts and professional investors say a long list of reasons is potentially behind the sharp moves in the bond market, which is seen as more rational and sober than the stock market. But at the heart is the risk the economy may be set to slow sharply from its current, extremely high growth.

Besides the new variants of the coronavirus, other risks to the economy include fading pandemic relief efforts from the U.S. government and a Federal Reserve that looks set to begin paring back its assistance for markets later this year.

Worries about a possible sharp slowdown have particularly hurt stocks whose profits are most closely tied to the strength of the economy. Stocks of smaller companies, for example, have been scuffling since hitting a peak in March even though many reports on the economy still show it’s growing at a very healthy rate.

The Russell 2000 index of smaller stocks slumped 2.3% Monday, outpacing losses for their larger rivals on Wall Street.

The selling pressure was widespread, with more than 90% of the stocks in the S&P 500 lower. Even Big Tech stocks were falling, with Apple down 3.1% and Mircrosoft 1.5% lower. During earlier hiccups for the stock market, investors would often big up such stocks further on expectations they will continue to grow almost regardless of the economy’s strength.

Among the few gainers on Wall Street were potential winners of a return to a stay-at-home economy. Clorox rose 1.2%, and Campbell Soup gained 1%.

In Europe, Germany’s DAX lost 2.9%, and France’s CAC 40 fell 2.9%. The FTSE 100 in London slumped 2.6%.

In Asia, Japan’s Nikkei 225 lost 1.3%, Hong Kong’s Hang Seng fell 1.8%, South Korea’s Kospi dropped 1%. Australian stocks sank 0.9%.

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Read full article at AL.com

Investors dump stocks, buy bonds as virus fears flare again

Los Angeles Times 20 July, 2021 - 07:10am

NEW YORK (AP) — Resurgent pandemic worries knocked stocks lower from Wall Street to Tokyo on Monday, fueled by fears that faster-spreading variants of the virus may upend the economy’s strong recovery.

The S&P 500 fell 2.1% in afternoon trading, after setting a record just a week earlier. In another sign of worry, the yield on the 10-year Treasury touched its lowest level in five months as investors scrambled for safer places to put their money.

The Dow Jones Industrial Average was down 935 points, or 2.7%, at 33,753, as of 1:50 p.m. Eastern time. The Nasdaq composite was 1.4% lower.

Across the country, the daily number of COVID has soared by nearly 20,000 over the last two weeks to about 32,000. The vaccine campaign has hit a wall, with the average number of daily inoculations sinking to the lowest levels since January, and cases are on the rise in all 50 states.

That’s why markets are concerned, even though reports show the economy is still recovering at a fantastically high rate and the general expectation is for it to deliver continued growth. Any worsening of virus trends threatens the high prices that stocks have achieved on expectations the economy will fulfill those lofty forecasts.

Financial markets have been showing signs of increased concerns for a while, but the U.S. stock market had remained largely resilient. The S&P 500 has had just two down weeks in the last eight, and the last time it had even a 5% pullback from a record high was in October.

Several analysts pointed to that backdrop of high prices and very calm movements for weeks while dissecting Monday’s drop.

“It’s a bit of an overreaction, but when you have a market that’s at record highs, that’s had the kind of run we’ve had, with virtually no pullback, it becomes extremely vulnerable to any sort of bad news,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “It was just a matter of what that tipping point was, and it seems we finally reached that this morning” with worries about the delta variant.

He and other analysts are optimistic stocks can rebound quickly. Investors have been trained recently to see every dip in stocks as merely an opportunity to buy low.

Barry Bannister, chief equity strategist at Stifel, was more pessimistic. He says the stock market may be in the early stages for a drop of as much as 10% following its big run higher in prices. The S&P 500 nearly doubled after hitting its bottom in March 2020.

“The valuations, they just got too frothy,” he said. “There was just so much optimism out there.”

The bond market has been louder and more persistent in its warnings. The yield on the 10-year Treasury tends to move with expectations for economic growth and for inflation, and it has been sinking since late March, when it was at roughly 1.75%. It fell to 1.19% Monday from 1.29% late Friday.

Analysts and professional investors say a long list of reasons is potentially behind the sharp moves in the bond market, which is seen as more rational and sober than the stock market. But at the heart is the risk the economy may be set to slow sharply from its current, extremely high growth.

Besides the new variants of the coronavirus, other risks to the economy include fading pandemic relief efforts from the U.S. government and a Federal Reserve that looks set to begin paring back its assistance for markets later this year.

Monday’s selling pressure was widespread, with nearly 95% of the stocks in the S&P 500 lower. Even Big Tech stocks were falling, with Apple down 3% and Microsoft 1.6% lower. Such stocks seemed nearly immune to virus fears during earlier downturns, rising on expectations they’ll continue growing almost regardless of the economy’s strength.

Even companies reporting strong profit growth got swept up in the downdraft. Tractor Supply said its quarterly profit and revenue topped Wall Street’s expectations, for example, but its stock fell 4.5%.

Across the S&P 500, analysts are forecasting profit growth of nearly 70% for the second quarter from a year earlier. That would be the strongest growth since 2009, when the economy was climbing out of the Great Recession.

But just like worries are rising that the economy’s growth has already peaked, analysts are trying to handicap by how much growth rates will slow in upcoming quarters and years for corporate profits.

AP Business Writer Yuri Kageyama contributed.

These stocks are already in a bear market amid Monday's market sell-off

CNBC 20 July, 2021 - 07:10am

Jitters around the delta variant of Covid hindering the economic comeback sparked a steep sell-off Monday on Wall Street, pushing a number of stocks into bear market territory already.

The Dow Jones Industrial Average dropped more than 700 points for its worst one-day decline since October. The S&P 500 fell 1.6%, led to the downside by energy stocks. Investors are dumping cyclical shares as coronavirus cases rebounded in the U.S. with the delta variant spreading among the unvaccinated.

Here are the stocks in the S&P 500 that have fallen the most from their 52-week highs, some of which have retreated more than 60% from their records. Bear markets are defined by a 20% decline or more from a recent peak.

Shares that are directly tied to a successful reopening such as airlines and cruise line operators bore the brunt of the sell-off. Carnival and Norwegian Cruise Line dropped more than 5% each, while Royal Caribbean fell nearly 4%. The trio have all tumbled at least 30% from their 52-week highs. Shares of United Airlines dropped 5.5% on Monday, pulling back nearly 32% from its recent high.

Discovery shares — both Class A and Class C — have plunged more than 60% from their records. ViacomCBS also slid a similar magnitude from its peer. Earlier this year, these media stocks were sold off in massive blocks during the collapse of Archegos Capital Management. The highly levered family office failed to meet its margin call, forcing brokers to sell these names.

A few names in the energy sector also pulled back a massive amount after an impressive rebound from the pandemic hit. Diamondback Energy and Enphase Energy both fell about 30% from their recent highs.

Tesla is also among the 20 biggest losers in the S&P 500, tumbling 29% from its 52-week high reached in late January. The electric vehicle maker was one of the biggest winners in 2020 with a whopping 740% rally as investors favored high-growth stocks.

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Stocks Skid, Yields Sink As Virus Fears Shake Global Markets

HuffPost 20 July, 2021 - 07:10am

NEW YORK (AP) — Resurgent pandemic worries knocked stocks lower from Wall Street to Tokyo on Monday, fueled by fears that faster-spreading variants of the virus may upend the economy’s strong recovery.

The S&P 500 fell 68.67, or 1.6%, to 4,258.49, after setting a record just a week earlier. In another sign of worry, the yield on the 10-year Treasury touched its lowest level in five months as investors scrambled for safer places to put their money.

The Dow Jones Industrial Average slumped 725.81, or 2.1%, to 33,962.04, while the Nasdaq composite lost 152.25, or 1.1%, to 14,274.98.

Airlines and stocks of other companies that would get hurt the most by potential COVID-19 restrictions took some of the heaviest losses, similar to the early days of the pandemic in February and March 2020. United Airlines lost 5.5%, mall owner Simon Property Group gave up 5.9%, and cruise operator Carnival fell 5.7%.

The drop also circled the world, with several European markets sinking roughly 2.5% and Asian indexes down a bit less. The price of benchmark U.S. crude, meanwhile, fell more than 7% after OPEC and allied nations agreed on Sunday to eventually allow for higher oil production this year.

Increased worries about the virus may seem strange to people in parts of the world where masks are coming off, or already have, thanks to COVID-19 vaccinations. But the World Health Organization says cases and deaths are climbing globally after a period of decline, spurred by the highly contagious delta variant. And given how tightly connected the global economy is, a hit anywhere can quickly affect others on the other side of the world.

Even in the U.S., where the vaccination rate is higher than in many other countries, people in Los Angeles County must once again wear masks indoors regardless of whether they’re vaccinated following spikes in cases, hospitalizations and deaths.

Across the country, the daily number of COVID cases has soared by nearly 20,000 over the last two weeks to about 32,000. The vaccine campaign has hit a wall, with the average number of daily inoculations sinking to the lowest levels since January, and cases are on the rise in all 50 states.

That’s why markets are concerned, even though reports show the economy is still recovering at a fantastically high rate and the general expectation is for it to deliver continued growth. Any worsening of virus trends threatens the high prices that stocks have achieved on expectations the economy will fulfill those lofty forecasts.

Financial markets have been showing signs of increased concerns for a while, but the U.S. stock market had remained largely resilient. The S&P 500 has had just two down weeks in the last eight, and the last time it had even a 5% pullback from a record high was in October.

Several analysts pointed to that backdrop of high prices and very calm movements for weeks while dissecting Monday’s drop.

“It’s a bit of an overreaction, but when you have a market that’s at record highs, that’s had the kind of run we’ve had, with virtually no pullback, it becomes extremely vulnerable to any sort of bad news,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “It was just a matter of what that tipping point was, and it seems we finally reached that this morning” with worries about the delta variant.

He and other analysts are optimistic stocks can rebound quickly. Investors have been trained recently to see every dip in stocks as merely an opportunity to buy low.

Barry Bannister, chief equity strategist at Stifel, was more pessimistic. He says the stock market may be in the early stages for a drop of as much as 10% following its big run higher in prices. The S&P 500 nearly doubled after hitting its bottom in March 2020.

“The valuations, they just got too frothy,” he said. “There was just so much optimism out there.”

The bond market has been louder and more persistent in its warnings. The yield on the 10-year Treasury tends to move with expectations for economic growth and for inflation, and it has been sinking since late March, when it was at roughly 1.75%. It fell to 1.20% Monday from 1.29% late Friday.

Analysts and professional investors say a long list of potential reasons is behind the sharp moves in the bond market, which is seen as more rational and sober than the stock market. But at the heart is the risk the economy may be set to slow sharply from its current, extremely high growth.

Besides the new variants of the coronavirus, other risks to the economy include fading pandemic relief efforts from the U.S. government and a Federal Reserve that looks set to begin paring back its assistance for markets later this year.

Monday’s selling pressure was widespread, with nearly 90% of the stocks in the S&P 500 lower. Even Big Tech stocks fell, with Apple down 2.7% and Microsoft 1.3% lower. Such stocks seemed nearly immune to virus fears during earlier downturns, rising with expectations for continued growth almost regardless of the economy’s strength.

Across the S&P 500, analysts are forecasting profit growth of nearly 70% for the second quarter from a year earlier. That would be the strongest growth since 2009, when the economy was climbing out of the Great Recession.

But just like worries are rising that the economy’s growth has already peaked, analysts are trying to handicap by how much growth rates will slow in upcoming quarters and years for corporate profits.

AP Business Writer Yuri Kageyama contributed.

COVID fears pull markets lower

Associated Press 20 July, 2021 - 07:10am

Stocks skid as virus fears shake markets; Dow falls 2.1%

WWLP-22News 20 July, 2021 - 07:10am

Stock market news live updates: Futures push higher after Delta-variant selloff hammers Wall Street

Yahoo Finance 20 July, 2021 - 06:17am

On Monday, major benchmarks suffered their worst declines of 2021, overwhelming quarterly earnings that have almost uniformly reflected a strong rebound. The rising case count driven by the Delta variant — a more communicable form of COVID-19 — pushed the Nasdaq and S&P 500 to their biggest drop in nearly two months, and sent benchmark Treasury yields to their largest decline in over 3 months as investors sought shelter from the uncertainty. The Dow's point drop was its worst since October 2020.

The darkening mood overshadowed anticipation about retail trading upstart Robinhood, which early Monday filed its prospectus to go public at a valuation of $35 billion. Jitters over the Delta variant even managed to outweigh market expectations for this week's batch of earnings, which will include industry leaders like Netflix (NFLX) and Johnson & Johnson (JNJ). According to data from Bank of America, second quarter earnings per share are tracking 3.5% above consensus, led by financials, with raised guidance and better-than-expected topline results also strong.

Still, the ongoing pandemic is proving increasingly difficult to control, even with a mass vaccination effort underway. Investors are fearful that soaring infection rates may trigger new round of restrictions, the likes of which brought the economy to a screeching halt last year. Already in Los Angeles, authorities have re-instituted indoor masking requirements, a precursor to what could lie ahead. 

Analysts are cautiously monitoring key sectors that may suffer the most if rising infection rates spark new restrictions. Citi Global Wealth’s David Bailin said rising coronavirus cases may not impact industrials much. 

However, "When it comes to leisure and services, a significant amount. And when it comes to global reopening, also a significant amount," he told Yahoo Finance Live. "That’s what the market’s digesting.”

In Europe, bourses rebounded in the wake of Monday's "Freedom Day" sell-off in the United Kingdom, which ironically began with the Prime Minister and the Chancellor having to isolate after being notified they came into contact with someone who was COVID-19 positive. 

The incident refocused attention on the Delta variant, which is driving a surge of new cases across the U.K. and the U.S., and sent the safe-haven 10-year Treasury bond yield (TNX) to its lowest levels since early March. 

Against the backdrop of surging demand and prices, Corporate America continues to surprise investors to the upside with second-quarter earnings results. About 8% of S&P 500 companies have reported results so far, mostly banks. Of those reporting, 85% have topped estimates, according to FactSet data.

After Tuesday's trading session, investors will absorb Netflix's Q2 earnings report. The streaming titan has been racking up Hollywood accolades, yet its stock has been treading water amid investor concerns about slowing growth as lockdowns ease

Dow futures (YM=F): 33,999.00+160.00 (+0.47%)

Nasdaq futures (NQ=F): 14,617.75+77.00 (+0.53%)

S&P 500 futures (ES=F): 4,269.25+18.00 (+0.42%)

Javier David is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek

Top news and what to watch in the markets on Tuesday, July 20, 2021.

Is the stock market still at risk of another plunge this summer?

Investors are struggling to calibrate a strong recovery against rising prices, and resurgent COVID-19 infections.

Thomas Lee, founder of Fundstrat Global Advisors, has a word of advice for investors hoping to buy the dip after Monday's selloff.

Wall Street is seeing "too much froth" and current virus jitters are triggering widespread panic selling of every top performing asset, including bitcoin, said one analyst.

(Reuters) -Robinhood Markets Inc is targeting a valuation of up to $35 billion in its initial public offering in the United States, the company revealed in a Monday filing, setting the stage for one of the most highly anticipated stock market listings this year. The listing plans come just months after the online brokerage found itself at the center of a confrontation between a new generation of retail investors and Wall Street hedge funds in late January. Robinhood was aiming for an IPO valuation of up to $40 billion, Reuters had previously reported.

Wall Street’s analysts know that buying low is part of a winning stock strategy, and they’ve been looking for stocks that are low – undervalued, and possibly hitting bottom. It’s the first step in an old formula for success, with the next, of course, being to sell high. Some recent picks from the analyst corps, pulled up via the TipRanks platform, may raise eyebrows. These are stocks new to the public trading markets, but they already have two attributes that may endear them to risk-tolerant inv

Despite the pickup in demand for $22K puts, the options market remains biased bullish for the long term.

(Bloomberg) -- Someday, the post-pandemic equities rally is going to end. When it does it will take a lot of newly christened stock bulls with it.Their refusal to bend has been the signature fact of the stock market for at least 12 months, putting a floor under four other selloffs in 2021 alone that look just like the one that has sheared almost 3% off the S&P 500 Index since Thursday. Whether the devotion of retail investors is enough to turn the tide again is the biggest question in markets ri

Monday's rout has been followed by a small bounce, but no doubt nerves have been rattled. JPMorgan sees plenty of beaten-down stocks ripe for the picking.

This week, earnings season is set to ramp up, offering investors a fuller picture of the extent of the rebound in corporate profits as social distancing standards eased. Data on the housing market will also be in focus.

A strengthening dollar and a global move to de-risk investments has hit the crypto space.

The number of 401(k) and IRA millionaires reached an all-time high in the first quarter of 2021, according to Fidelity Investments. Retirement account balances have been steadily recovering in the year since COVID first emerged, even surpassing pre-pandemic levels. Today, more … Continue reading → The post How to Become a 401(k) Millionaire appeared first on SmartAsset Blog.

In its quest to build one of the largest lithium mines in the United States, Piedmont Lithium Inc has overlooked one crucial constituency: its North Carolina neighbors. Piedmont last autumn signed a deal https://www.reuters.com/article/us-piedmont-lithium-deal-tesla-idUSKBN26J03H to supply U.S. electric automaker Tesla Inc with lithium sourced from its deposits in North Carolina, sending the company's stock up tenfold. Piedmont has also hired investment banks to find investors for its $840 million project, which would include an open-air pit more than 500 feet (152 m) deep and facilities to produce lithium-based electric vehicle (EV) battery chemicals.

(Bloomberg) -- U.S. stock-index futures gained as equity markets stabilized after Monday’s rout, with investors weighing corporate earnings against the uncertain outlook for global growth. Treasury yields edged lower and the dollar was steady.Contracts on the S&P 500 and Nasdaq 100 signaled a firmer open for U.S. stocks Tuesday. International Business Machines Corp. rose in pre-market trading after reporting its biggest increase in quarterly revenue in three years. The 10-year Treasury yield hel

After Monday’s losses, failure to move through the day’s pivot levels would bring support levels into play once more.

We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always […]

After four straight trading days of unmitigated selling, shares of graphics and crypto-mining semiconductor manufacturer Nvidia (NASDAQ: NVDA) reversed course today -- and bounced nearly 5%! Of course, those morning gains proved fleeting, but as of 2:15 p.m. EDT, Nvidia stock is still holding onto a respectable 3.3% gain. Investors can send their thank-you notes directly to Morningstar, which was quoted today commenting that "after taking a fresh look at our thesis on Nvidia, we are raising our moat rating to wide from narrow, thanks to intangible assets related to the design of graphics processing units (GPUs)."

US stocks rebounding from Monday's slump hours before the opening bell

Fox Business 20 July, 2021 - 02:55am

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U.S. equity futures are pointing to a higher open when trading begins Tuesday on Wall Street.

On Wall Street, the S&P 500 fell 1.6% to 4,258.49, after setting a record just a week earlier. In another sign of worry, the yield on the 10-year Treasury touched its lowest level in five months as investors scrambled for safer places to put their money.

The yield on the 10-year Treasury was steady at 1.21% after falling to 1.20% Monday from 1.29% late Friday. In March it was at roughly 1.75%.

The Dow Jones Industrial Average slumped 2.1% to 33,962.04, while the Nasdaq composite lost 1.1% to 14,274.98.

Airlines and other companies that would get hurt the most by potential COVID-19 restrictions took some of the heaviest losses, similar to the early days of the pandemic in February and March 2020. United Airlines lost 5.5%, mall owner Simon Property Group gave up 5.9%, and cruise operator Carnival fell 5.7%.

The World Health Organization says cases and deaths are climbing globally after a period of decline, spurred by the highly contagious delta variant. And given how tightly connected the global economy is, a hit anywhere can quickly affect the other side of the world.

Even in the U.S., where the vaccination rate is higher than in many other countries, people in Los Angeles County must once again wear masks indoors regardless of whether they're vaccinated following spikes in cases, hospitalizations and deaths.

Any worsening of virus trends threatens the high prices that stocks have achieved on expectations the economy will fulfill those lofty forecasts.

"It’s a bit of an overreaction, but when you have a market that’s at record highs, that’s had the kind of run we’ve had, with virtually no pullback, it becomes extremely vulnerable to any sort of bad news," said Randy Frederick, vice president of trading & derivatives at Charles Schwab. "It was just a matter of what that tipping point was, and it seems we finally reached that this morning" with worries about the delta variant.

He and other analysts are optimistic stocks can rebound quickly. Investors have been trained recently to see every dip in stocks as merely an opportunity to buy low.

Barry Bannister, chief equity strategist at Stifel, was more pessimistic. He says the stock market may be in the early stages for a drop of as much as 10% following its big run higher. The S&P 500 nearly doubled after hitting its bottom in March 2020.

"The valuations, they just got too frothy," he said. "There was just so much optimism out there."

Besides the new variants of the coronavirus, other risks to the economy include fading pandemic relief efforts from the U.S. government and a Federal Reserve that looks set to begin paring back its assistance for markets later this year.

Monday's selling pressure was widespread, with nearly 90% of the stocks in the S&P 500 lower. Even Big Tech stocks fell, with Apple down 2.7% and Microsoft 1.3% lower.

This week also brings a slew of earnings reports. Across the S&P 500, analysts are forecasting profit growth of nearly 70% for the second quarter from a year earlier. That would be the strongest growth since 2009, when the economy was climbing out of the Great Recession.

Meanwhile, Asian shares fell Tuesday as worries were growing that a faster-spreading variant of the coronavirus could upend the global economic recovery.

Japan's benchmark Nikkei 225 slipped 0.9% to 27,417.75. South Korea's Kospi shed 0.6% to 3,226.19. Australia's S&P/ASX 200 declined 0.5% to 7,252.20. Hong Kong's Hang Seng lost 1.1% to 27,189.43, while the Shanghai Composite fell 0.2% to 3,531.54.

Worries about the pandemic continue in Japan, with three days to go before the Tokyo Olympics open. Some 11,000 athletes are taking part in the Games, and 22,000 other people have arrived since July 1 to take part in the Games.

Several athletes and more than 60 other non-athletes affiliated with the Games have tested positive. Fears are growing that, despite repeated tests, infections may spread.

The vaccination rollout has been slower in Japan than in other developed nations, with just 22% of the population fully vaccinated. Reports that fully vaccinated people have gotten infected are another cause for worry. The Japanese government has repeatedly promised "a safe and secure" Games.

In energy trading, benchmark U.S. crude rose 10 cents to $66.52 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, added 40 cents to $69.02 a barrel.

In currency trading, the U.S. dollar rose to 109.52 Japanese yen from 109.46 yen. The euro fell to $1.1779 from $1.1802.

AP Business Writers Stan Choe, Alex Veiga and Damian J. Troise contributed.

This material may not be published, broadcast, rewritten, or redistributed. ©2021 FOX News Network, LLC. All rights reserved. FAQ - New Privacy Policy

Why did the Dow drop 700 points on Monday?

USA TODAY 19 July, 2021 - 09:25am

From Wall Street to Sydney, stocks sank Monday amid worries the pandemic is worsening in hotspots around the world. Here's what happened.

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First GameStop, then silver. Reddit users are putting hedge funds to the test, one short squeeze at a time. Here's what you need to know. USA TODAY

Resurgent pandemic worries knocked stocks lower from Wall Street to Tokyo on Monday, fueled by fears that faster-spreading variants of the virus may upend the economy’s strong recovery.

The Dow Jones Industrial Average shed 725.81 points, or 2.1%, to 33,962.04, its biggest decline since October. The S&P 500 fell 1.6% to 4,258.49, after setting a record high just a week ago. The Nasdaq composite dropped 1.1% to 14,274.98.

Airlines and stocks of other companies that would get hurt the most by potential COVID-19 restrictions took some of the heaviest losses, similar to the early days of the pandemic in February and March 2020. United Airlines lost 5.5%, mall owner Simon Property Group dropped 5.9%, and cruise operator Carnival fell 5.7%.

The drop circled the world, with several European markets sinking roughly 2.5% and Asian indexes down a bit less.

Increased worries about the virus may seem strange to people in parts of the world where masks are coming off, or already have, thanks to COVID-19 vaccinations.

But the World Health Organization says cases and deaths are climbing globally after a period of decline, spurred by the highly contagious delta variant. And given how tightly connected the global economy is, a hit anywhere can quickly affect others on the other side of the world.

Even in the U.S., where the vaccination rate is higher than in many other countries, people in Los Angeles County must once again wear masks indoors regardless of whether they’re vaccinated following spikes in cases, hospitalizations and deaths.

Across the country, the daily number of COVID has soared by nearly 20,000 over the last two weeks to about 32,000. The vaccine campaign has hit a wall, with the average number of daily inoculations sinking to the lowest levels since January, and cases are on the rise in all 50 states.

That’s why investors are concerned, even though reports show the economy is still recovering at a fantastically high rate and the general expectation is for it to deliver continued growth. Any worsening of virus trends threatens the high prices that stocks have gained, thanks to expectations that the economy will fulfill those lofty forecasts.

It's possible. Financial markets have been showing signs of increased concerns for a while, but the U.S. stock market had remained largely resilient. The S&P 500 has had just two down weeks in the last eight, and the last time it had even a 5% pullback from a record high was in October.

Several analysts pointed to that backdrop of high prices and very calm movements for weeks while dissecting Monday’s drop.

“It’s a bit of an overreaction, but when you have a market that’s at record highs, that’s had the kind of run we’ve had, with virtually no pullback, it becomes extremely vulnerable to any sort of bad news,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “It was just a matter of what that tipping point was, and it seems we finally reached that this morning” with worries about the delta variant.

He and other analysts are optimistic stocks can rebound quickly. Investors have been trained recently to see every dip in stocks as merely an opportunity to buy low.

Barry Bannister, chief equity strategist at Stifel, was more pessimistic. He says the stock market may be in the early stages for a drop of as much as 10% following its big run higher in prices. The S&P 500 nearly doubled after hitting its bottom in March 2020.

Analysts often refer to a 10% drop from a recent high as a correction. 

“There was just so much optimism out there,” Bannister said. 

Any weakness could present an opportunity to scoop up more stocks at lower prices, or investors could at least hold steady in their retirement accounts, according to Sam Stovall, chief investment strategist at investment research firm CFRA.

“You want to be the most greedy and hungry to buy stocks when prices are down rather than when prices are up,” says Stovall. “You’re better off buying than bailing.”

For long-term retirement holders, history suggests that you’re better off sitting tight, he added.

In another sign of worry, the yield on the 10-year Treasury dropped close to its lowest level in five months. It touched 1.21% as investors scrambled for safer places to put their money.

The bond market has been louder and more persistent in its warnings. The yield on the 10-year Treasury tends to move with expectations for economic growth and for inflation, and it has been sinking since late March when it was at roughly 1.75%. It fell to 1.19% Monday from 1.29% late Friday.

Analysts and professional investors say a long list of reasons is potentially behind the sharp moves in the bond market, which is seen as more rational and sober than the stock market. But at the heart is the risk the economy may be set to slow sharply from its current, extremely high growth.

Besides the new variants of the coronavirus, other risks to the economy include fading pandemic relief efforts from the U.S. government and a Federal Reserve that looks set to begin paring back its assistance for markets later this year.

Monday’s decoinepressure was widespread, with nearly 95% of the stocks in the S&P 500 lower. Even Big Tech stocks fell, with Apple down 3% and Microsoft 1.6% lower. Such stocks seemed nearly immune to virus fears during earlier downturns, rising on expectations they’ll continue growing almost regardless of the economy’s strength.

Even companies reporting strong profit growth got swept up in the downdraft. Tractor Supply said its quarterly profit and revenue topped Wall Street’s expectations, for example, but its stock fell 4.5%.

Across the S&P 500, analysts are forecasting profit growth of nearly 70% for the second quarter from a year earlier. That would be the strongest growth since 2009, when the economy was climbing out of the Great Recession.

But just like worries are rising that the economy’s growth has already peaked, analysts are trying to handicap by how much growth rates will slow in upcoming quarters and years for corporate profits.

The price of benchmark U.S. crude, meanwhile, sank more than 7% after OPEC and allied nations agreed on Sunday to eventually allow for higher oil production this year.

Separately, Robinhood, the online brokerage that found itself embroiled in this year’s meme stock phenomenon, will seek to go public with a market valuation of up to $35 billion.

© 2021 USA TODAY, a division of Gannett Satellite Information Network, LLC.

S&P 500 Falls as Covid Resurgence Sparks Blood Bath on Wall Street By Investing.com

Investing.com 19 July, 2021 - 12:00am

Investing.com – The S&P 500 slumped Monday, led by a rout in energy and financials as investors grew concerned over the global recovery following a surge infections brought on by the Delta variant.        

The S&P 500 fell 1.6%, the Nasdaq was down 1.1%. and the Dow Jones Industrial Average fell 2.1%, or 726 points, though was down 953 points at the lows of the day.

"A plethora of macro uncertainty is now in investor crosshairs including pandemic / variant spread; reflation / inflation; future of CB policy; earnings; and geopolitical tensions (watch the ongoing escalation between U.S. & allies against China)," Mark Luschini, chief Investment strategist at Janney Montgomery Scott said in a note.

New coronavirus cases climbed in all 50 states on Sunday for the fourth day in a row on a rolling seven-day average, a rise not seen since the spring 2020 surge, Stifel said, citing Johns Hopkins University data. The spike in the US follows rising infections globally including in the UK. 

"The Delta variant of the coronavirus has now spread to more than a hundred countries. The way it is spreading, it will soon become the most dominant strain globally," Dr. Poonam Khetrapal Singh, regional director of the World Health Organization - South-East Asia said. The Delta variant has reportedly reached the UK, US, Singapore and many other nations."

This backdrop of worries has muddied the outlook for growth, prompting a sharp decline in Treasury yields, and pressuring cyclical stocks including financials and energy.

Energy fell more than 3% as U.S. oil prices dropped 7.5% below $70 level after OPEC and its allies agreed to lift output at time when the delta Covid variant casts doubt on global demand.

The fears on Wall street underscored by a jump in the VIX – or so-called fear index - to a two-month high.

Financials, meanwhile, were pressured by a the fall in U.S. bonds yields, with the 10-year Treasury diving below 1.2% to hit fresh February lows.

JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) were in the red. 

Lower interest rates hurt banks' net interest margin – the difference between the interest income generated by banks and the amount of interest paid out to their lenders.

Megacap tech was no exception to the selloff, though fared somewhat better relative to beaten down cyclical stocks.

Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT, Amazon.com (NASDAQ:AMZN) were more than 1% lower.

A sea of red also washed over travel-related stocks, with airlines and cruise stocks sharply lower amid fears rising infections threaten travel demand.

United Airlines Holdings (NASDAQ:UAL), American Airlines (NASDAQ:AAL), Boeing (NYSE:BA) were hit hard, with the latter down more than 5%. While Carnival (NYSE:CCL) slumped 6%.

Fears that some restrictions could return, however, proved a boon for the stay-at-home stocks.

Teladoc Inc (NYSE:TDOC) was up 3%, while Peloton (NASDAQ:PTON) and DoorDash (NYSE:DASH) rose 7% and 5%. Zoom Video Communications (NASDAQ:ZM) proved an exception, however, falling about 2% after buying cloud contact center software  Five9 in an all-stock transaction that valued the company at $14.7 billion.

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