Wall Street falls at the opening because of the Delta variant: the Dow Jones plunges more than 2%

WSJ – Dow Interview
July 19, 2021
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Wall Street falls at the opening because of the Delta variant: the Dow Jones plunges more than 2%

The New York Stock Exchange fell on Monday at the opening, fearing the impact on the economy and on inflation from the spread of the Delta variant of the coronavirus.

Around 2:10 p.m. GMT, the Dow Jones index plunged 2.05% to 33,977.35 points, the Nasdaq, with strong technological coloring, dropped 1.62% to 14,193.87 points. The extended S&P 500 index fell 1.74% to 4,251.99 points.

Friday, the Dow Jones index fell 0.86%, the Nasdaq 0.80% and the broader S&P 500 index 0.75% to 4,327.16 points.

For the first time in almost two months, the three indices had recorded a week in loss, the Dow Jones dropping 0.52%, the Nasdaq 1.87% and the S&P 500 0.97%.

At the opening Monday, the eleven sectors of the S&P 500 were all in the red starting with the energy sector which dropped 4.25% in the wake of the fall in oil prices after an OPEC + agreement for increase its production, while that of information technology fell by 1.56%.

Investors were concerned about inflation but above all about the resurgence of contamination linked to Covid-19.

“The Covid is the main factor because, as we can see in the bond market, yields are falling,” noted Peter Cardillo of Spartan Capital Markets, noting that this reflected the fear that the recovery of the global economy would be slowed down. by new restrictions.

Yields on 10-year bond yields sagged to 1.18% from 1.29% on Friday, sliding to their lowest level since February.

– Fear factor –

“The fear factor is gripping the market. See what happens in Britain and Europe as the number of cases increases in the United States”, underlined the economist of Spartan Capital while the British Prime Minister Boris Johnson was forced into solitary confinement after the contamination of his Minister of Health.

This atmosphere relegated to the background the good business results expected for this busy week with in particular the quarterly accounts of IBM on Monday, Netflix and United Airlines on Tuesday, Johnson and Johnson and Coca-Cola on Wednesday.

“The persistence of the variant appears to exacerbate uncertainty as to whether or not we have reached a peak in terms of company results and economic growth rates,” added Schwab analysts.

“In a certain sense, the market, which is at a high level, takes this excuse to adjust its high valuation”, also commented Peter Cardillo.

Among the actions of the day, the online video conference platform Zoom, which announced on Sunday an agreement to buy the customer services specialist through the “cloud” Five9 for $ 14.7 billion, fell 4% to 3 , $ 47.

The big banks continued their decline like Bank of America (-3.22%), JPMorgan Chase (-2.48%) and Goldman Sachs (3.90%) despite their good results announced last week.

Apple, whose stock had reached an all-time high the week before, fell almost 2% to $ 143. Tesla dropped 3.05% to $ 624. Very sensitive to the evolution of the epidemic, airlines plunged by more than 7% like American Airlines and United Airlines.