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July 19, 2021, 4:47 p.m. EDT

Dow books 725-point loss, worst day since October, as spread of delta variant and global tensions rattle investors

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By Joy Wiltermuth and William Watts

U.S. stocks closed sharply lower Monday, joining the selloff in global equities, as concerns grew about the spread of the delta variant of the coronavirus that causes COVID-19, and as tensions ratcheted up between the U.S. and China.

How did major indexes fare?

  • The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.75% skid 725.81 points, or 2.1%, to finish at 33,962.04. That was its biggest daily percentage slide since Oct. 28 2020, according to Down Jones Market Data.

  • The S&P 50 /zigman2/quotes/210599714/realtime SPX -0.58% dropped 68.67 points, or 1.6%, closing at 4,258.49, its worst daily percentage drop since May 12.

  • The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.26% gave up 152.25 points, or 1.1%, ending at 14,274.98 to book five straight days of declines, its longest losing stretch since Oct. 19.

  • The small-cap Russell 2000 /zigman2/quotes/210598147/delayed RUT +0.08% shed 32.56 points, or 1.5%, to end at 2,130.68, just shy of a pullback of 10% from its recent high, or the widely used definition of a market correction.

Stocks closed lower Friday, with all three major indexes down for the week, ending a string of three, consecutive weekly wins. The Dow saw a 0.5% weekly decline, while the S&P 500 slid 1% and the Nasdaq Composite shed 1.9%.

What drove the market?

U.S. stocks fell hard, but off the session’s worst levels, as COVID-19 cases rose world-wide and concerns about “ peak everything ” and rising U.S. and China tensions rattled investors.

“The delta variant is getting a lot of attention right now as an explanation for weakness,” said Sahak Manuelian, head of equity trading at Wedbush Securities in Los Angeles.

“Another good reason is really peak everything: peak valuations, peak growth,” he said. “Add in the delta variant and you have a decent case for why stocks are lower.”

“But the third thing, which might be the most troubling, is U.S.-China relations. They are certainly getting worse.”

The Biden administration on Monday blamed China for a hack of Microsoft Exchange email server software that compromised tens of thousands of computers around the world earlier this year. The European Union and Britain also pointed the finger at China.

Democratic senators also were expected to make public on Monday a plan to raise $14 billion annually by imposing taxes on China and other countries not significantly reducing emissions that warm the planet, the New York Times reported.

On the pandemic front, concerns about the virus have been particularly problematic for sectors and industries, such as travel, that were expected to benefit the most from the reopening of the global economy. The energy sector was the weakest of the S&P 500’s 11 key sectors Monday, ending down 3.6%, while the Energy Select Sector SPDR ETF /zigman2/quotes/206420077/composite XLE -0.37% also fell 3.6%.

Crude-oil futures /zigman2/quotes/209723049/delayed CL00 -0.81% settled below $67 a barrel on Monday, their biggest daily percentage drop since March, following a weekend deal by the OPEC+ group to boost oil production. Major producers will add 400,000 barrels a day in production each month beginning in August until existing curbs totaling 5.8 million barrels a day are erased later next year.

Analysts, however, said the steep selloff in crude also reflected worries about the delta variant.

Airline stocks tumbled, with the industry-tracking U.S. Global Jets ETF /zigman2/quotes/207744796/composite JETS +0.05% dropping 4.2%, while plane-maker Boeing Co. /zigman2/quotes/208579720/composite BA +1.29% , a Dow component, tumbled 4.9%, on fears the spread of the variant could trigger renewed travel restrictions.

Also Monday, Treasurys continued to rally, keeping pressure on yields , which move in the opposite direction of prices. The yield on the 10-year Treasury note /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -0.20% was down 11.9 basis points, dipping below 1.18% at its lows and deepening its decline to levels not seen since February, according to Dow Jones Market Data.

US : Dow Jones Global
-236.94 -0.75%
Volume: 517.19M
May 19, 2022 4:57p
-22.89 -0.58%
Volume: 2.77B
May 19, 2022 4:57p
US : Nasdaq
-29.66 -0.26%
Volume: 4.38M
May 19, 2022 5:16p
US : US Composite
+1.38 +0.08%
Volume: 1.86M
May 19, 2022 6:33p
US : U.S.: NYSE Arca
$ 81.42
-0.30 -0.37%
Volume: 35.72M
May 19, 2022 4:00p
US : U.S.: Nymex
$ 109.00
-0.89 -0.81%
Volume: 18,678
May 20, 2022 12:33a
US : U.S.: NYSE Arca
$ 19.52
+0.01 +0.05%
Volume: 5.69M
May 19, 2022 4:00p
$ 127.14
+1.62 +1.29%
Volume: 8.08M
May 19, 2022 4:00p
P/E Ratio
Dividend Yield
Market Cap
$74.26 billion
Rev. per Employee
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
-0.0058 -0.20%
Volume: 0.00
May 20, 2022 12:43a
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