Dow slide nears 1,000 points on COVID-19 uptick

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Selling intensified for U.S. stock markets Monday midday as the recent rise in COVID-19 infections has stoked fears of an economic slowdown.

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New COVID-19 infections jumped 70% last week to about 30,000 a day as the Delta variant continued to spread. Deaths rose to an average of 250 a day, mostly in unvaccinated people.

The Dow Jones Industrial Average fell over 900 points, or 2.6%, while the S&P 500 and the Nasdaq Composite declined 2% and 1.5%, respectively. The decline is on pace to be the worst session of the year after the major averages on Friday suffered their biggest single-day declines in a month.

Selling in the equity markets caused investors to seek safety in the U.S. Treasury market with the yield on the 10-year note falling 10 basis points to 1.19%, the lowest since mid-February.

In stocks, rate-sensitive banks, like JPMorgan Chase & Co. Bank of America Corp. and Citigroup Inc., were lower.

Stocks tied to the reopening of the global economy were under extra pressure including Delta Air Lines Inc., Carnival Corp. and Las Vegas Sands Corp., amid concerns a COVID-19 resurgence could cause virus-wary travelers to stay home. Restaurants also taking a hit.

Meanwhile, energy companies were in the crosshairs as West Texas Intermediate crude oil tumbled $2.62 to $69.19 a barrel after OPEC and its allies agreed to raise production by an additional 2 million barrels per day beginning in August.

In deals, Zoom Video Communications Inc. agreed to buy cloud-based call center operator Five9 Inc. for $14.7 billion in stock. The deal, which was done at a 13% premium to Five9’s closing price on Friday, will pay Five9 shareholders 0.5533 Zoom shares for each Five9 share they own.

Elsewhere, Johnson & Johnson is considering a plan that would put its Baby Powder and other talc-related operations into a new business that would then file for bankruptcy, Reuters reports, citing seven people familiar with the matter. Such a move could result in lower payouts for lawsuits not settled before a bankruptcy filing.

Overseas markets were sharply lower.


European bourses were sharply lower with Germany’s DAX 30 slipping2.68%, France’s CAC 40 losing 2.48% and Britain’s FTSE 100 falling 2.33%.

In Asia, Hong Kong’s Hang Seng index slid 1.84%, Japan’s Nikkei 225 tumbled 1.25% and China’s Shanghai Composite was little changed.

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