After moving sharply lower early in the session, stocks continue to see substantial weakness in mid-day trading on Monday. With the initial drop, the major averages fell to their lowest intraday levels in almost a month.
The major averages have climbed off their worst levels of the day but currently remain firmly negative. The Dow is down 727.56 points or 2.1 percent at 33,960.29, the Nasdaq is down 130.09 points or 0.9 percent at 14,297.15 and the S&P 500 is down 64.42 points or 1.5 percent at 4,262.74.
The early sell-off on Wall Street partly reflected concerns about a resurgence of the coronavirus, as the delta variant contributes to a spike in infections in the U.S.
According to data from the CDC, the 7-day average of Covid-19 cases in the U.S. has jumped to nearly 30,000 after falling as low as 11,455 a month ago.
The renewed virus concerns have led to significant weakness among companies hit hardest by the pandemic, with cruise operators Carnival (CCL), Norwegian Cruise Lines (NCLH) and Royal Caribbean (RCL) posting steep losses.
Airline stocks have climbed off their worst levels but also continue to see significant weakness, with the NYSE Arca Airline Index down by 3.7 percent after hitting its lowest intraday level in well over five months.
Considerable weakness also remains visible among energy stocks, with are moving sharply lower along with the price of crude oil.
Crude for August delivery is plummeting $4.48 to $67.33 a barrel following news OPEC and its allies have agreed to steadily end production cuts by September 2022.
Reflecting the weakness in the energy sector, the NYSE Arca Oil Index is down by 4.2 percent, the Philadelphia Oil Service Index is down by 3.9 percent and the NYSE Arca Natural Gas Index is down by 3.2 percent.
Banking stocks also continue to see notable weakness in mid-day trading, with the KBW Bank Index down by 3.1 percent after hitting its lowest intraday level in almost four months.
Steel, gold, chemical and utilities stocks have also moved to the downside on the day, reflecting broad based selling pressure.
In U.S. economic news, the National Association of Home Builders released a report showing an unexpected dip in U.S. homebuilder confidence in the month of July.
The report showed the NAHB/Wells Fargo Housing Market Index edged down to 80 in July from 81 in June. The modest decrease surprised economists, who had expected the index to inch up to 82.
With the unexpected drop, the housing market index slipped to its lowest level since hitting 78 in August of 2020.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index slumped by 1.3 percent, while Hong Kong’s Hang Seng Index plunged by 1.8 percent.
The major European markets also showed significant moves to the downside. While the U.K.’s FTSE 100 Index tumbled by 2.3 percent, the French CAC 40 Index and the German DAX Index plummeted by 2.5 percent and 2.6 percent, respectively.
In the bond market, treasuries have pulled back off their best levels but continue to see significant strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 8.7 basis points at 1.212 percent.
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