Stocks tumble amid concerns over the Delta variant’s impact on growth.

0 1

The potential for a fast spreading outbreak of the Delta variant of the coronavirus gripped financial markets on Monday, putting Wall Street on track for its worst daily decline in months.

The S&P 500 fell as much as 2 percent, on pace for its sharpest daily decline since mid-May. The Stoxx Europe 600 dropped 2.3 percent, its worst decline this year. Major indexes in Hong Kong and Japan also ended the day sharply lower.

The sell-off was broad, reflecting a range of concerns about economic growth and the potential for rising Covid-19 infections to lead to the return of restrictions on travel and tourism. With oil prices tumbling, energy stocks led the declines, but shares of travel companies were also sharply lower. Norwegian Cruise Line and American Airlines each fell about 5 percent. Banks, also sensitive to the outlook for the economy, tumbled as well.

The Dow Jones industrial average was down about 2.7 percent, in what would be its biggest daily loss this year.

Yields on government bonds also slid as investors turned to them in search of a less-risky place to park their cash. Bond yields fell as their prices rose. The yield on 10-year Treasury notes slid to 1.19 percent, while yields in Britain and Germany were also lower.

“There’s a fear that this is as good as it’s going to get for risky assets,” said Edward Moya, a senior market analyst at Oanda, a foreign currency exchange. “We’re still in the early stages of earnings season, where we’re going to see companies continue to voice concerns over pricing pressures.”

Consumers are also worried about the rise in prices. A consumer survey released by the University of Michigan on Friday showed that the inflation rate has become a primary concern for households, and led to a drop in consumer sentiment in early July. On Thursday, Jerome H. Powell, the Federal Reserve chair, told the Senate Banking Committee that inflation had risen to uncomfortably high levels and said that he and his colleagues were watching price gains carefully.

The drop on Monday comes with the S&P 500 close to record highs. Even after Monday’s decline, the index has gained close to 13 percent this year as investors bet on economic recovery, though there have been short, turbulent stretches amid concerns about growth and inflation. The rise of the Delta variant seemed to give investors a new reason to pull back.

The highly contagious variant now makes up the majority of new cases in the United States, which are now averaging over 31,000 a day. Los Angeles County on Sunday became the first major county to revert to requiring masks for all people indoors in public spaces.

Cases are also rising fast in Europe and Asia. In recent days, Indonesia has emerged as the epicenter of the current outbreak, after overtaking India and Brazil as the nation with the highest count of new infections, and Singapore on Monday said that it was facing the highest levels of infection in almost a year.

In Japan, more than two dozen athletes, coaches, referees and other officials participating in the Tokyo Olympics have tested positive for the virus. A teenage alternate on the U.S. women’s gymnastics team tested positive for the coronavirus, the United States Olympic and Paralympic Committee confirmed Monday.

Oil prices fell after major oil producers reached a deal on Sunday to increase production. OPEC and Russia agreed to pump more oil next month, increasing worldwide supplies by 2 percent, but supplies are likely to remain tight until at least the fall, analysts said. West Texas Intermediate, the U.S. crude benchmark, dropped 6.7 percent to $66.99 a barrel. Shares for Occidental Petroleum Corporation fell more than 5 percent while ConocoPhillips dropped more than 4 percent.

Read original article here

Denial of responsibility! Swift Telecast is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave A Reply

Your email address will not be published.