Stocks sank Monday as new data showed a jump in COVID-19 cases in both the U.S. and Europe. Restrictions tightened across major countries overseas, raising the specter of a further pullback in business operations and deeper anchor on global economic activity.
Losses accelerated throughout the session, and the Dow closed lower by 650 points, or 2.3%. That marked the index’s worst day since early September. The S&P 500 and Nasdaq each also sold off sharply during the session.
Shares of companies set to benefit from a broader economic reopening including airlines like American Airlines (AAL), cruise lines including Norwegian Cruise Line Holdings (NCLH) and hotels like Wynn Resorts (WYNN) sank. Shares of AstraZeneca (AZN), on the other hand, outperformed after the Financial Times reported that its COVID-19 vaccine candidate developed with the University of Oxford produced a robust immune response in elderly individuals.
The U.S. posted back-to-back days of record-high new virus cases over the weekend, with new virus cases topping 80,000 for each of Friday and Saturday. States in the West and Midwest have been hardest hit by the latest jump in cases.
France endured its own record-high day for new coronavirus cases on Sunday, when the country reported more than 52,000 positive cases over a 24-hour period. Two-thirds of the country became subject to a previously announced 9 p.m. curfew starting Friday night. In Italy, which hit a record-high for new cases last week, new business restrictions came into effect Sunday. Spain declared a state of emergency over the weekend, which also included a country-wide curfew.
“Markets ultimately care about the economic impact of pandemic news,” UBS economist Paul Donovan said in a note Monday morning. “Italy and Spain have followed France in adopting the 'Buffy the Vampire Slayer' approach (it is not safe to be out of doors after dark). This is obviously bad news for bars and restaurants, but more positive for supermarkets and home entertainment.”
Elsewhere, shares of Boeing (BA), Lockheed Martin (LMT) and Raytheon Technologies (RTX) came under pressure in early trading after China said it would impose sanctions on the defense units of both companies, following the U.S. approval of a $1.8 billion arms sale to Taiwan last week. China, which considers Taiwan to be part of its territory, has not yet specified the sanctions that will be put into place.
4:03 p.m. ET: Dow drops 650 points, or 2.3% for worst session in nearly 2 months as virus cases surge
Here were the main moves in markets as of 4:03 p.m. ET:
S&P 500 (^GSPC): -64.45 (-1.86%) to 3,400.94
Dow (^DJI): -649.86 (-2.29%) to 27,685.71
Nasdaq (^IXIC): -189.34 (-1.64%) to 11,358.94
Crude (CL=F): -$1.34 (-3.36%) to $38.51 a barrel
Gold (GC=F): -$1.20 (-0.06%) to $1,904.00 per ounce
10-year Treasury (^TNX): -4 bps to yield 0.8010%
1:20 p.m. ET: WHO says ‘trade-offs, compromises’ needed to combat pandemic
The World Health Organization’s Director-General Tedros Adhanom Ghebreyesus acknowledged the growing virus concern in the northern hemisphere during a press conference on Monday, noting that many intensive-care units are “filling up to capacity in some places, particularly in Europe and North America.”
"No one wants more so-called COVID-19 lockdowns. But if we want to avoid them, we all have to play our part,” he said. "We can keep our kids in school, we can keep businesses open, we can preserve lives and livelihoods. We can do it. But we must all make trade-offs, compromises and sacrifices."
“For individuals, families and communities, that means staying at home and especially if you’ve been exposed to a COVID-19 case,” he added.
12:49 p.m. ET: Stocks drop further, Dow sink 800+ points, or 2.9%
The three major indices added to losses Monday afternoon, with the Dow off more than 800 points, or 2.9%. The S&P 500 fell 2.4%, or 83 points, and the Nasdaq dropped 2.2%, or 250 points.
The energy, industrials and financials sectors sold off most strongly in the S&P 500, as cyclicals were hit hard by concerns over a sharp rise in COVID-19 cases that could lead to more restrictions. American Express and Salesforce each dropped more than 4% in the 30-stock Dow.
11:48 a.m. ET: Kudlow says virus relief talks will continue on Monday
White House economic adviser Larry Kudlow said Monday that Democratic lawmakers and Trump administration officials are set to continue talks later in the day on another coronavirus relief package.
Kudlow, speaking to reporters in Washington, noted that “there are still a number of areas” in House Speaker Nancy Pelosi’s plan “that the president cannot accept, just can’t accept.” The size of aid to state and local governments dealing with the pandemic has been a key sticking point among negotiators.
11:05 a.m. ET: Selloff accelerates, Dow drops 650+ points
The three major indices’ losses accelerated Monday mid-morning, with the Dow dropping more than 650 points, or 2.5%. The S&P 500 fell about 2%, and the Nasdaq dropped 1.5%.
Losses in the Dow were led by American Express and Salesforce.
10:07 a.m. ET: New home sales unexpectedly declined in September for the first time in 5 months
New-home sales in the U.S. dropped 3.5% in September to a seasonally adjusted annualized rate of 959,000, the Commerce Department said Monday, after a 4.8% jump to a rate of 1.011 million during the previous month. This marked the first month-over-month drop in new-home sales since April, at the height of the pandemic.
Consensus economists were expected new-home sales to rise another 1.4% to extend the multi-month run of outperformance in the housing market relative to other areas of the economy.
The drop in seasonally adjusted new-home sales was led by the Northeast, where sales fell nearly 29% in September from August. Sales in the Midwest and South each also fell by greater than 4% during the period. Those in the West rose 3.8%, though this was not enough to offset the drops elsewhere.
The median sale price for homes in September was $326,800, up from $315,700 during the same month in 2019.
10:00 a.m. ET: Hasbro shares sink after reporting drop in sales, a week after Mattel reported growth
Hasbro’s revenue dropped 4% to $1.78 billion, which still was slightly ahead of consensus expectations for $1.74 billion, according to Bloomberg data. The decline was led primarily by a drop in entertainment, licensing and digital revenue, with this segment’s sales down 23% over last year as a drought of new movie releases weighed on Hasbro’s ability to market toys connected to feature films.
Shares of Hasbro dropped more than 9% Monday morning, and have fallen more than 19% so far for the year to date.
9:31 a.m. ET: Stocks open lower as virus concerns spike
Here were the main moves in markets, as of 9:31 a.m. ET:
S&P 500 (^GSPC): -32.73 points (-0.94%) to 3,432.66
Dow (^DJI): -298.90 points (-1.05%) to 28,036.67
Nasdaq (^IXIC): -90.08 points (-0.77%) to 11,458.82
Crude (CL=F): -$0.81 (-2.03%) to $39.04 a barrel
Gold (GC=F): -$1.80 (-0.09%) to $1,903.40 per ounce
10-year Treasury (^TNX): -2.5 bps to yield 0.816%
8:28 a.m. ET: Ant Group prices IPO on track to raise nearly $35 billion in record public debut
Ant Group, the Chinese financial technology company started by Jack Ma, on Monday priced its dual initial public offerings in Shanghai and Hong Kong, putting the firm on track to raise about $35 billion in the world’s biggest-ever share sale.
The Shanghai stock was priced at 68.8 yuan, or $10.27, a share, while the Hong Kong shares were priced at HK$80, or $10.32 each. Each IPO will therefore raise more than $17.2 billion, putting the company on track for an IPO of nearly $35 billion to top even the public debut of oil giant Saudi Aramco last year. According to Bloomberg data, Ant will be valued at about $280 billion ahead of its IPO.
7:28 a.m. ET Monday: Dow futures shed 200+ points as COVID-19 cases jump
Here were the main moves in markets, as of 7:28 a.m. ET:
S&P 500 futures (ES=F): 3,423.00, down 28.75 points or 0.83%
Dow futures (YM=F): 27,943.00, down 246 points or 0.87%
Nasdaq futures (NQ=F): 11,585.5, down 78 points or 0.67%
Crude (CL=F): -$0.78 (-1.96%) to $39.07 a barrel
Gold (GC=F): +$0.30 (+0.02%) to $1,905.50 per ounce
10-year Treasury (^TNX): -2.7 bps to yield 0.814%