Salem Radio Network News Monday, August 2, 2021

Business

Wall Street set to tumble at open as virus surge sparks recovery worries

By Devik Jain

(Reuters) -U.S. stock indexes were set to fall sharply at open on Monday, with economy-linked value and travel stocks taking a hit after a spike in global COVID-19 cases raised fresh concerns about slowing economic growth.

New infections surged in parts of Asia and England, while U.S. COVID-19 cases soared 70% last week, fueled by the Delta variant. Deaths rose 26% week-over-week to an average of 250 lives lost a day in the United States, mostly in unvaccinated patients.

Shares of travel companies, which took a hammering last year during lockdowns but have climbed recently on reopening hopes, led declines before the opening bell.

Airline operators and cruiseliners including Southwest Airlines Co, Delta Air Lines Inc, United Airlines, American Airlines, Royal Caribbean Group, Carnival Corp and Norwegian Cruise Line dropped between 3.3% and 5.8%.

Rate-sensitive lenders Bank of America Corp, JPMorgan Chase & Co, Goldman Sachs Group Inc, Morgan Stanley and Citigroup Inc all shed between 2.9% and 3.2%, tracking a fall in the benchmark 10-year Treasury yield to mid-February lows. [US/]

“Before the Delta variant started gaining traction, things were priced in for a very strong recovery,” said David Grecsek, managing director of investment strategy and research at Aspiriant in New York.

“What we’re seeing here is any data or news that’s going to upset that sort of serene, low volatility, and high corporate earnings, market is going to react to that. But you don’t want to see excess speculation. Some correction is healthy.”

Wall Street’s main indexes closed lower on Friday, with investors moving into defensive sectors on concerns that a resurgence in coronavirus cases might delay a strong economic recovery and derail a sharp market rebound from 2020 lows.

The benchmark S&P 500 index has gained nearly 15.2% so far this year, with market participants now looking for strong company forecasts to justify sky-high valuations.

After strong quarterly reports from big banks last week, focus shifts to tech earnings with companies including International Business Machines Corp, Netflix, Texas Instruments and Intel set to report this week.

Analysts on average expect 72% growth in earnings per share for S&P 500 companies, according to IBES estimate data from Refinitiv.

At 8:32 am, Dow E-minis were down 489 points, or 1.41%, S&P 500 e-minis were down 50 points, or 1.16%, and Nasdaq 100 e-minis were down 134 points, or 0.91%.

Marathon Petroleum Corp, Chevron Corp, Schlumberger NV, Exxon Mobil Corp, Halliburton and Occidental Petroleum fell between 3.9% and 5.8%, as oil prices slid after OPEC+ producers agreed to raise output. [O/R]

U.S.-listed shares of Alibaba Holding, Baidu and ridesharing app Didi Global declined about 3% each on renewed fears of anti-monopoly action against major technology firms.

Zoom Video Communications Inc slipped 0.5% after the teleconferencing services provider announced a $14.7 billion all-stock deal to buy cloud-based call center operator Five9 Inc.

Five9’s shares jumped 8.6%.

(Reporting by Devik Jain in Bengaluru; Editing by Maju Samuel)

Previous
Next

Editorial Cartoons

View More »

Michael Ramirez
Thu, Jul 29, 2021

X CLOSE