US close: Dow suffers worst day in three months as Delta concerns grow

Equities closed deep into negative territory on Wall Street on Monday, with investors focusing on rising Covid-19 case numbers globally and the effect that might have on government bids to reopen economies.

At the close, the Dow Jones Industrial Average was down 2.09% at 33,962.04, while the S&P 500 lost 1.59% to 4,258.49 and the Nasdaq Composite was off 1.06% at 14,274.98.0

It was the worst day for the Dow in more than three months.

“Concerns about how robust recovery really is has sent the oil price under $70 a barrel, in marked contrast to the $100 that was being discussed as a real possibility for this summer,” said AJ Bell financial analyst Danni Hewson.

“The OPEC+ spat resolution will have played a part but Delta is destructive and US markets aren’t immune either.

“Investors appear to be flocking to the safe haven of government bonds with yields plummeting to levels last seen back in February, and Wall Street has followed the trajectory of European markets.”

Having come through the worst of the first waves of the Covid-19 pandemic in a much better shape than their Western counterparts, a number of countries in the Asia-Pacific region, including Indonesia, Thailand, South Korea, Vietnam and Singapore, were now battling fresh outbreaks and imposing restrictions.

Cases in the United States and UK, as well as on much of the continent, were continuing to climb as well.

Earlier, Jeffrey Halley at Oanda noted an article in the Wall Street Journal, penned by US Treasury Secretary Janet Yellen, which criticised the US-China trade deal as “failing to lift the malaise" in markets.

Also dampening the mood were plunging oil prices, with West Texas Intermediate last down 7.72% at $66.27 per barrel, and Brent crude losing 6.62% to $68.72.

Those moves came after OPEC and its oil-producing allies agreed to increase their combined output by 400,000 barrels per day from August.

Bond markets were in focus as well, with the yield on the benchmark 10-year US Treasury note last down 10 basis points at 1.194%.

On the economic front, the National Association of Homebuilders Housing Market Index dipped to an 11-month low of 80.0 in July, from a reading of 81.0 in June and below consensus expectations for 81.0.

In equities, cinema operator AMC Entertainment closed down 0.97%, having plunged more than 10% earlier in the session, before briefly breaking into the green late in the day.

On the upside, so-called ‘meme stock’ GameStop was up 2.67% on the back of a fresh rampage from the video game retailer’s loyal investor fans on social media platform Reddit.

While volumes on GameStop were lower than average, MarketWatch cited data from HypeEquity as showing that its “social media volume” was up more than 100%, as social media users mentioned ‘buying’ or ‘holding’ twice as much as they did ‘selling’ on the day.

Dow Jones - Risers

Honeywell International Inc. (HON) $230.94 0.00%
Dowdupont Inc. (DWDP) $30.52 0.00%
Procter & Gamble Co. (PG) $140.51 -0.05%
Walmart Inc. (WMT) $141.23 -0.23%
Salesforce.Com Inc. (CRM) $237.55 -0.37%
Amgen Inc. (AMGN) $246.73 -0.50%
Intel Corp. (INTC) $54.64 -0.60%
International Business Machines Corporation (CDI) (IBM) $137.92 -0.71%
Johnson & Johnson (JNJ) $166.89 -0.73%
Home Depot Inc. (HD) $318.87 -0.83%