Dow tumbles 700 points for its worst drop since October as investors fear a Covid resurgence
U.S. stocks fell aggressively Monday on concern a rebound in Covid cases would slow global economic growth. The selling picked up as the session went on, and the Dow Jones Industrial Average had its worst day since last October.
The Dow dropped 725.81 points, or 2.1%, to 33,962.04 in a broad-based rout that sent all 30 members lower. At one point during the session, the Dow was down 946 points before recovering some ground into the close.
The S&P 500 fell 1.6% to 4,258.49. Energy, financials and industrials were the worst-performing sectors.
The tech-dominated Nasdaq Composite slid 1.1% to 14,274.98, posting its fifth-straight day of losses and worst losing streak since October.
The 10-year Treasury yield reached a five-month low of 1.17%, exacerbating fears about the slowing economy. The small-cap Russell 2000 dropped 1.5% and briefly dipped into correction territory on an intraday basis - down more than 10% from its March high.
Covid cases have rebounded in the U.S. this month, with the delta variant spreading among the unvaccinated. The U.S. is averaging nearly 26,000 new cases a day in the last seven days through Sunday, up from a seven-day average of around 11,000 cases a day a month ago, according to CDC data. Cases were already flaring up around the world because of the delta variant.
The Cboe Volatility Index surged as high as 25 amid the broad market sell-off, its highest level since May. The so-called fear gauge looks at prices of options on the S&P 500 to track the level of fear on Wall Street.
Despite Monday’s decline, the overall damage to the market remains tame. The S&P 500 is still just 3.1% below its record reached last week and investors are hoping more better-than-expected earnings results will put a bottom under the market.
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