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July 19, 2021, 11:55 p.m. EDT

Asian markets fall after Wall Street’s worst day in months

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By Associated Press

TOKYO — Asian shares fell Tuesday as worries were growing that a faster-spreading variant of the coronavirus could upend the global economic recovery.

Japan’s benchmark Nikkei 225 /zigman2/quotes/210597971/delayed JP:NIK +0.53% slipped 0.7% in early trading. South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.01% shed 0.5% and Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.59% inched down 0.3%. Hong Kong’s Hang Seng /zigman2/quotes/210598030/delayed HK:HSI +0.28% lost 1.1%, while the Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP -0.26% declined 0.5%. Taiwan’s Taiex /zigman2/quotes/210597977/delayed TW:Y9999 +0.20% slipped 1%. Exchanges in Singapore, Malaysia and Indonesia were closed for holidays.

Worries about the pandemic continue in Japan, with three days to go before the Tokyo Olympics open. Some 11,000 athletes are taking part in the Games, and 22,000 other people have arrived since July 1 to take part in the Games.

Several athletes and more than 60 other non-athletes affiliated with the Games have tested positive. Fears are growing that, despite repeated tests, infections may spread.

The vaccination rollout has been slower in Japan than in other developed nations, with just 22% of the population fully vaccinated. Reports that fully vaccinated people have gotten infected are another cause for worry. The Japanese government has repeatedly promised “a safe and secure” Games.

On Wall Street, the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.16% fell 1.6% to 4,258.49, after setting a record just a week earlier. In another sign of worry, the yield on the 10-year Treasury touched its lowest level in five months as investors scrambled for safer places to put their money.

The yield on the 10-year Treasury was steady at 1.21% after falling to 1.20% Monday from 1.29% late Friday. In March it was at roughly 1.75%.

The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.18% slumped 2.1% to 33,962.04, while the Nasdaq composite /zigman2/quotes/210598365/realtime COMP +0.13% lost 1.1% to 14,274.98.

The World Health Organization says cases and deaths are climbing globally after a period of decline, spurred by the highly contagious delta variant. And given how tightly connected the global economy is, a hit anywhere can quickly affect the other side of the world.

Even in the U.S., where the vaccination rate is higher than in many other countries,  people in Los Angeles County must once again wear masks indoors  regardless of whether they’re vaccinated following spikes in cases, hospitalizations and deaths.

Any worsening of virus trends threatens the high prices that stocks have achieved on expectations the economy will fulfill those lofty forecasts.

“It’s a bit of an overreaction, but when you have a market that’s at record highs, that’s had the kind of run we’ve had, with virtually no pullback, it becomes extremely vulnerable to any sort of bad news,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “It was just a matter of what that tipping point was, and it seems we finally reached that this morning” with worries about the delta variant.

He and other analysts are optimistic stocks can rebound quickly. Investors have been trained recently to see every dip in stocks as merely an opportunity to buy low.

Barry Bannister, chief equity strategist at Stifel, was more pessimistic. He says the stock market may be in the early stages for a drop of as much as 10% following its big run higher. The S&P 500 nearly doubled after hitting its bottom in March 2020.

“The valuations, they just got too frothy,” he said. “There was just so much optimism out there.”

Besides the new variants of the coronavirus, other risks to the economy include fading pandemic relief efforts from the U.S. government and a Federal Reserve that looks set to begin paring back its assistance for markets later this year.

In energy trading, benchmark U.S. crude rose 25 cents to $66.60 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude , the international standard, added 17 cents to $68.79 a barrel.

In currency trading, the U.S. dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0793% rose to 109.54 Japanese yen from 109.46 yen.

JP : Nikkei
+161.77 +0.53%
Volume: 0.00
Sept. 17, 2021 11:30a
KR : Korea Exchange
+0.35 +0.01%
Volume: 319,109
Sept. 17, 2021 11:41a
-44.30 -0.59%
Volume: 366,678
Sept. 17, 2021 12:41p
HK : Hong Kong Exchange
+70.28 +0.28%
Volume: 682,537
Sept. 17, 2021 10:46a
CN : China: Shanghai
-9.30 -0.26%
Volume: 23.57B
Sept. 17, 2021 10:45a
TW : Taiwan Stock Exchange
+34.55 +0.20%
Volume: 0.00
Sept. 17, 2021 10:41a
-6.95 -0.16%
Volume: 1.83B
Sept. 16, 2021 5:07p
US : Dow Jones Global
-63.07 -0.18%
Volume: 279.31M
Sept. 16, 2021 5:07p
US : Nasdaq
+20.39 +0.13%
Volume: 3.34M
Sept. 16, 2021 5:16p
US : Tullett Prebon
+0.0870 +0.0793%
Volume: 0.0000
Sept. 16, 2021 11:00p

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