Stocks drop amid Delta variant scare

 

With the daily fast decline in months, Wall Street suffers its biggest blow in months caused by the Delta variant outbreak and the market’s anticipation of travel and tourism restrictions.


Nasdaq and S&P 500 jump to their biggest drop in nearly two months and sent benchmark yields to their largest decline in over 3 months as investors sought shelter from the uncertainty. The Dow’s point drop was its worst since October 2020.

The selling was prompted by a weaker-than-expected reading on consumer sentiment, overshadowed anticipation about retail trading upstart Robinhood, which early Monday filed its prospectus to go public at a valuation of $35 billion.

The platform is targeting a $2 billion capital raise, and aims to price the stock within a range of $38 to $42 per share.

Fears over the Delta variant even managed to outweigh market expectations for this week’s batch of earnings, which will include industry leaders like Netflix (NFLX) and Johnson & Johnson (JNJ).

According to data from Bank of America, second quarter earnings per share are tracking 3.5% above consensus, led by financials, with raised guidance and better-than-expected topline results also strong.

With fear of higher cost of living resulting from the surge caused by Delta variant, market is prompting a “flight to safety” move around the global equity markets, investors are moving into safe-haven instruments, like U.S. Treasuries and the U.S. dollar.  This raises concerns that the pace of economic growth is slowing.

With oil prices tumbling, energy stocks led the declines, but shares of travel companies also tumbled. Norwegian Cruise Line and United Airlines each fell 5.5 percent.

Banks, also sensitive to the outlook for the economy, slid as well. JPMorgan Chase fell 3.3 percent, while Bank of America fell 2.6 percent. (HMP/Headline PH)

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