After coming under pressure early in the session, stocks have seen further downside over the course of the trading day on Monday. With the drop on the day, the major averages are adding to the losses posted last week.
Currently, the major averages are lingering near their worst levels of the day. The Dow is down 721.36 points or 2.6 percent at 27,614.21, the Nasdaq is down 205.46 points or 1.8 percent at 11,342.82 and the S&P 500 is down 71.58 points or 2.1 percent at 3,393.81.
The sell-off on Wall Street comes amid concerns about a resurgence in coronavirus cases, with new infections reaching a new record high last Friday.
Data from John Hopkins University showed that new coronavirus cases reached a new high of 83,757 last Friday and topped 83,000 again on Saturday.
In an interview with CNN on Sunday, White House chief of staff Mark Meadows argued that the pandemic could not be controlled and suggested the administration would focus on vaccines and therapeutics.
The spike in new coronavirus cases comes as lawmakers in Washington appear to remain at an impasse over a new stimulus bill.
Negotiations continue, but traders appear pessimistic that an agreement on a new relief package will be reached before next week’s elections.
Adding to the negative sentiment, the Commerce Department released a report showing an unexpected slump in new home sales in the month of September.
The report said new home sales tumbled by 3.5 percent to an annual rate of 959,000 in September after jumping by 3 percent to a revised rate of 994,000 in August. The pullback surprised economists, who had expected new home sales to surge up by 2.8 percent.
“We expect the pace of sales to moderate further in the fourth quarter,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.
She added, “While strong demand and low mortgage rates are supportive of home sales, the resurgence in Covid-19 cases, a recovery that may be shifting into reverse and a weak labor market pose downside risks.”
Airline stocks continue to see substantial weakness in mid-day trading, with the NYSE Arca Airline Index plunging by 4.6 percent.
Significant weakness is also visible among computer hardware stocks, as reflected by the 4 percent slump by the NYSE Arca Computer Hardware Index.
Energy stocks are also seeing considerable weakness amid a steep drop by the price of crude oil. Crude for December delivery is tumbling $1.22 to $38.63 a barrel.
Reflecting the weakness in the energy sector, the NYSE Arca Oil Index is down by 3.3 percent, the Philadelphia Oil Service Index is down by 3.1 percent and the NYSE Arca Natural Gas Index is down by 3 percent.
Housing, networking and chemical stocks have also shown notable moves to the downside amid broad-based weakness on Wall Street.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index edged down by 0.1 percent, while China’s Shanghai Composite Index slid by 0.8 percent.
The major European markets also moved to the downside on the day. While the German DAX Index plunged by 3.6 percent, the French CAC 40 Index slumped by 1.7 percent and the U.K.’s FTSE 100 Index fell by 0.8 percent.
In the bond market, treasuries have moved higher after ending the previous session nearly unchanged. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4 basis points at 0.801 percent.
For comments and feedback contact: firstname.lastname@example.org