US open: Stocks see big drop, alongside slump in oil and Treasury yields

Trading on Wall Street got off to a poor start on Monday with investors' focus on rising Covid-19 case numbers around the world and the toll they might take on attempts to reopen economies.

As of 1544 BST, the Dow Jones Industrials was down by 2.12% or 732.53 points to 33,958.61, alongside a 1.66% or 71.70 point drop for the S&P 500 to 4,256.24 while the Nasdaq Composite was retreating by 1.29% or 187.91 points to 14,240.20.

"US markets have taken their cues from today’s declines in European markets, opening sharply lower as concerns about the economic prospects for the rest of this year become shrouded in uncertainty, with the S&P500 sinking below last week’s lows and below the 4,300 level, and to its lowest levels this month," said Michael Hewson, chief market analyst at CMC Markets UK.

"From concerns about the reflation trade, we’ve gone full reverse ferret in the face of what is becoming rising worries that spiralling Delta cases could undermine the global recovery story, and prompt new restrictions as we head into the autumn."

Having in many cases been spared the worst of the first waves of the pandemic, several Asian countries including Indonesia, Thailand, South Korea, Vietnam and Singapore were now battling outbreaks and imposing restrictions.

Meanwhile, cases in the US and UK, as on much of the continent, were continuing to climb.

For his part, Jeffrey Halley at Oanda noted the failure of an article in the Wall Street Journal, penned by US Treasury Secretary, Janet Yellen, criticising the US-China trade deal "had failed to lift the malaise" in markets.

Also dampening the mood was a 6.2% slump in front-dated West Texas crude oil futures to $67.35 a barrel.

Contributing to the selling in oil, at the weekend, OPEC+ countries agreed to up their combined output by 400,000 barrels a day from August.

In parallel, the yield on the benchmark 10-year US Treasury note was down by 10 basis points to just under 1.20%.

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

Dow Jones - Risers

Procter & Gamble Co. (PG) $141.18 0.47%
Walmart Inc. (WMT) $141.74 0.13%
Dowdupont Inc. (DWDP) $30.52 0.00%
Honeywell International Inc. (HON) $230.94 0.00%
Amgen Inc. (AMGN) $247.30 -0.27%
Johnson & Johnson (JNJ) $166.85 -0.74%
Merck & Co. Inc. (MRK) $77.42 -0.77%
Walgreens Boots Alliance, Inc. (WBA) $45.63 -0.85%
Verizon Communications Inc. (VZ) $55.94 -0.93%
Intel Corp. (INTC) $54.45 -0.95%