Wall Street Ends Sharply Lower as Delta Variant Sparks New Lockdown Fears

NEW YORK (Reuters) -
(Reuters/Carlo Allegri/File Photo)

A surge in Delta variant infections sparked a broad sell-off on Wall Street on Monday as investors feared renewed COVID-19 shutdowns and a protracted economic recovery.

All three major U.S. stock indexes ended the session sharply lower, with the S&P and the Nasdaq suffering their largest one-day percentage drop since mid-May.

The blue-chip Dow had its worst day in nearly nine months.

The risk-off sentiment also sent U.S. 10-year Treasury yields sliding, pulling rate sensitive banks stock prices with them.

“Much of it is related to the Delta (variant),” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “There’s some concern too that maybe the economy is not going to open up as quickly as everyone thinks, and the big boom that everyone’s expecting is going to be more of a pop than a boom.”

“We’re woefully off of breakneck economic growth, and judging by the activity we’re seeing we’re overestimating a lot of the economic reports,” Nolte added.

Travel and leisure stocks plunged, with the S&P 1500 Airline index and the S&P 1500 Hotel and Restaurant index losing significantly more ground than the broader market.

Unofficially, the Dow Jones Industrial Average fell 724.56 points, or 2.09%, to 33,963.29, the S&P 500 lost 68.36 points, or 1.58%, to 4,258.8 and the Nasdaq Composite dropped 152.25 points, or 1.06%, to 14,274.98.

All 11 major sectors in the S&P 500 closed deep in negative territory.