After turning lower over the course of the previous session, stocks have shown a substantial move to the downside in morning trading on Monday. With the drop, the major averages have fallen to their lowest intraday levels in almost a month.
Currently, the major averages are just off their worst levels of the day. The Dow is down 770.05 points or 2.2 percent at 33,917.80, the Nasdaq is down 225.39 points or 1.6 percent at 14,201.85 and the S&P 500 is down 80.89 points or 1.9 percent at 4,246.27.
The sell-off on Wall Street reflects 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 also moved sharply lower amid renewed Covid concerns, dragging the NYSE Arca Airline Index down by 6.2 percent to its lowest intraday level in well over five months.
Energy stocks are also seeing significant weakness, as the price of crude oil plunges following news OPEC and its allies have agreed to steadily end production cuts by September 2022. Crude for August delivery is plummeting $3.82 to $67.99 a barrel.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 5.1 percent, the NYSE Arca Oil Index is down by 4.6 percent and the NYSE Arca Natural Gas Index is down by 3.5 percent.
Considerable weakness has also emerged among banking stocks, as reflected by the 3.6 percent slump by the KBW Bank Index. The index has fallen to its lowest intraday level in almost four months.
Steel, brokerage, chemical and housing stocks are also seeing considerable weakness, moving lower along with most of the other major sectors.
The weakness among housing stocks comes after 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 have also shown significant moves to the downside. While the U.K.’s FTSE 100 Index has plummeted by 2.6 percent, the French CAC 40 Index and the German DAX Index are both down by 2.9 percent.
In the bond market, treasuries have moved sharply higher amid the sell-off on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 11.3 basis points at 1.187 percent.
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