Dow falls 800+ amid worries about global resurgence in COVID-19 cases – Honolulu, Hawaii

Honolulu, Hawaii 2021-07-19 15:35:06 –

New York (NEXSTAR) — A resurrected pandemic concern was knocking down stocks from Wall Street to Sydney on Monday. This was boosted by fear that a more rapidly spreading variant of the virus might hinder a strong economic recovery.

The S & P 500 fell 2% in the afternoon trading after setting a record just a week ago. Another sign of concern is that 10-year Treasury yields reached their lowest levels in five months as investors scrambled to invest in safer places.

The Dow Jones Industrial Average was 33,791 at 12:42 EST, down 896 points (2.6%). The Nasdaq Composite Index was 1.4% lower.

As in the early days of the February and March 2020 pandemics, the airline and other airline stocks most affected by potential COVID-19 restrictions suffered the most losses. Mall owner Simon Property Group fell 5.4% and cruise operator carnival lost 5.2%.

The fall went around the world, with some European markets falling about 2.5% and Asian indices falling slightly. Meanwhile, benchmark US crude oil prices have fallen by more than 6% after OPEC and its allies agreed on Sunday, ultimately allowing oil production to increase this year.

Increased concern about Virus The COVID-19 vaccination may seem strange to people in areas where the mask is off or already present, but the World Health Organization has declined, stimulated by highly contagious ones. Delta variants say that cases and mortality are increasing worldwide after a period of time. And given how tightly connected the world economy is, hitting everywhere can quickly affect others on the other side of the world.

Experts say Indonesia has become a new epicenter of the pandemic as outbreaks worsen across Southeast Asia. Meanwhile, some athletes tested positive for COVID-19 in the Olympic Village in Tokyo, and the Olympics are scheduled to begin on Friday.

Even in the United States, where vaccination rates are generally high, people in Los Angeles County will need to wear masks indoors again, regardless of whether they have been vaccinated following a surge in cases, hospitalizations, and deaths.

Nationwide, the number of COVID cases per day has increased by about 20,000 over the past two weeks to about 32,000. Vaccine campaigns have hit a wall and average daily doses have fallen to their lowest levels since January. Cases are increasing in all 50 states.

The local coronavirus surge is beginning to affect unvaccinated communities such as Missouri and Arkansas, where hospitals are once again running out of space. Almost all COVID patients in the hospital are unvaccinated. Over 68% of the US adult population has been vaccinated at least once, and 59% have been fully vaccinated. And about 12 states have not yet vaccinated 40% of their population.

Financial markets have shown signs of heightened concern for some time, but the US stock market has generally remained resilient. The S & P 500 has been down for just two weeks in the last eight weeks, with a 5% pull back from its all-time high in October.

Some analysts pointed out the background of the highs and very mild movements for several weeks while analyzing the price decline on Monday.

“It’s a bit overreacting, but if there’s a market at record highs, it’s an execution like we’ve done, with virtually no pullbacks and very vulnerable to all sorts of bad news. “It will be,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab. “It was a question of what that turning point was, and we seem to have finally reached it this morning,” worried about the Delta variant.

He and other analysts are optimistic that stock prices could recover soon. Investors have recently been trained to see all the declines in stocks simply as an opportunity to buy at low prices. In addition, the general expectation is that the economy will continue to grow.

Barry Banister, Stifel’s chief equity strategist, was more pessimistic. He states that the stock market may be in the early stages of falling by as much as 10% after a sharp rise in prices. The S & P 500 has almost doubled since it bottomed out in March 2020.

“The evaluation was too foamy,” he said. “There was so much optimism there.”

The bond market was bigger and more sustainable in its warning. Yields on 10-year government bonds tend to fluctuate in response to expectations of economic growth and inflation, down from about 1.75% in late March. Monday fell from 1.29% on Friday to 1.20%.

Analysts and professional investors say the long list of reasons could be behind the upheaval in the bond market, which is considered more rational and calm than the stock market. But at the core is the risk that the economy could slow sharply from its current very high growth.

In addition to new variants of the coronavirus, other risks to the economy include the decline of US government pandemic bailout efforts and the Federal Reserve, which is expected to begin reducing support for the market later this year.

Selling pressure was widespread on Monday, with nearly 95% of S & P 500 shares declining. Even Big Tech stocks have fallen, Apple has fallen 2.5% and Microsoft has fallen 1.5%. Such stocks appeared to be largely immune to the fear of the virus during the early recession and rose on the expectation that they would continue to grow regardless of economic strength.

Losses occurred despite some companies reporting stronger profit growth from April to June than analysts expected. For example, Tractor Supply said both profits and revenues exceeded Wall Street expectations, but inventories fell 5.1%.

Analysts predict second-quarter earnings growth of around 70% year-over-year across the S & P 500. It will be the strongest growth since 2009, when the economy emerged from the Great Recession.

But as concerns grow that economic growth has already peaked, analysts are trying to handicap how much growth will slow in the coming quarters and years for the benefit of the company. is.

The Associated Press contributed to this story.

Dow falls 800+ amid worries about global resurgence in COVID-19 cases Source link Dow falls 800+ amid worries about global resurgence in COVID-19 cases

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