{"id":118436,"date":"2021-07-19T19:13:47","date_gmt":"2021-07-19T19:13:47","guid":{"rendered":"https:\/\/fin2me.com\/?p=118436"},"modified":"2021-07-19T19:13:47","modified_gmt":"2021-07-19T19:13:47","slug":"dow-sp-500-sink-2-as-virus-surge-stifles-recovery-hopes","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/dow-sp-500-sink-2-as-virus-surge-stifles-recovery-hopes\/","title":{"rendered":"Dow, S&P 500 sink 2% as virus surge stifles recovery hopes"},"content":{"rendered":"
(Reuters) – The Dow and the S&P 500 indexes sank more than 2% on Monday as investors sold off economically sensitive shares and travel stocks and sought the perceived safety of bonds on fears that a spike in COVID-19 cases would derail a broader economic recovery.<\/p> New infections surged in parts of Asia and England, while U.S. COVID-19 cases soared 70% last week, fueled by the Delta variant.<\/p>\n All 11 S&P sectors fell, with the so-called value stocks, including financial, industrial, materials and energy, dropping between 2.5% and 4.4%.<\/p>\n The banking sub-index sank 3.4%, tracking a fall in the benchmark 10-year Treasury yield to mid-February lows. [US\/]<\/p>\n \u201cThere\u2019s concern among investors the Delta variant could reset the clock in terms of the progress we\u2019ve made with COVID-19 and the pickup in the economy,\u201d said Andre Bakhos, managing director at New Vines Capital LLC in New Jersey.<\/p>\n The benchmark S&P 500 snapped a three-week winning streak on Friday, with only defensive sectors, perceived to be relatively safe during times of economic uncertainty, posting small gains.<\/p>\n On Monday, the technology-heavy Nasdaq index outperformed the broader market as investors again flocked to the growth-linked stocks that led Wall Street\u2019s recovery from its coronavirus-lows last year.<\/p>\n \u201cThis is a way for investors to hedge the risk of COVID-19,\u201d said Max Gokhman, head of asset allocation at Pacific Life Fund Advisors in Newport Beach, California.<\/p>\n \u201cWe know the tech stocks will tend to do better when there\u2019s less stability, as they are less sensitive to consumers increasing their spending on services and going out.\u201d<\/p>\n Still, by 01:40 p.m. ET, the Nasdaq Composite lost 1.40%, to 14,224.71.<\/p>\n By comparison, the Dow Jones Industrial Average fell 904.77 points, or 2.61%, and was on track for its worst session since October 2020, while the S&P 500 slipped 2.04% and was set for its biggest one-day percentage fall since May.<\/p>\n Economically sensitive small caps and transports were down 1.6% and 1.8% respectively.<\/p>\n The CBOE volatility index, dubbed Wall Street\u2019s fear gauge, jumped to a two-month high.<\/p>\n Shares of travel-related companies, which had just begun to climb after suffering steep losses during pandemic-driven lockdowns last year, fell again on Monday. The S&P 500 Airlines sub index slumped nearly 4%.<\/p>\n Cruiseliners Royal Caribbean Group, Carnival Corp and Norwegian Cruise Line dropped between 4.6% and 5.9%.<\/p>\n After strong quarterly reports from big banks last week, focus now shifts to tech earnings with companies including IBM, Netflix, Texas Instruments and Intel set to report this week.<\/p>\n Graphic: S&P 500 drops from record high as new coronavirus cases climb:<\/p>\n U.S.-listed shares of Alibaba Holding, Baidu and ridesharing app Didi Global declined between 2% and 7.1% on renewed fears of anti-monopoly action against major technology firms.<\/p>\n Zoom Video Communications Inc slipped 4.2% after the teleconferencing services provider announced a $14.7 billion all-stock deal to buy cloud-based call center operator Five9 Inc.<\/p>\n Five9\u2019s shares jumped 4.6%.<\/p>\n Declining issues outnumbered advancers by a 6.6-to-1 ratio on the NYSE and by a 3-to-1 ratio on the Nasdaq.<\/p>\n The S&P 500 posted 12 new 52-week highs and no new lows while the Nasdaq recorded 39 new highs and 246 new lows.<\/p>\n