Back to top

Image: Bigstock

Stock Market News for Jul 20, 2021

Read MoreHide Full Article

U.S. stocks ended sharply lower on Monday, joining a broad selloff in global equities on concerns that the economic recovery would slow down again due to rising COVID-19 cases. The Dow recorded its worst day since last October. All the three major indexes ended in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 2.1% or 725.81 points to end at 33,962.04 points, recording its worst single-day percentage slide since Oct 28, 2020.

Shares of American Airlines Group Inc. (AAL - Free Report) and Delta Air Lines, Inc. (DAL - Free Report) declined 4.1% and 3.7%, respectively. Delta Airlines and American Airlines each carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 slid 1.6% or 68.67 points to finish at 4,258.49 points. This was the index’s biggest daily percentage decline since May 12 as energy and financial stocks took a hit for the second straight day.

The Energy Select Sector SPDR (XLE) declined 3.5%, while the Financials Select Sector SPDR (XLF) fell 2.8%. All the 11 sectors of the benchmark index closed in negative territory.

The tech-heavy Nasdaq slipped 1.1% or 152.25 points to end at 14,274.98 points, recording its fifth straight day of decline. This was also the index’s longest losing stretch since Oct 19.

The fear-gauge CBOE Volatility Index (VIX) was up 21.95% to 22.50. A total of 12.02 billion shares were traded on Monday, higher than the last 20-session average of 10.17 billion. Decliners outnumbered advancers on the NYSE by a 5.21-to-1 ratio. On Nasdaq, a 2.52-to-1 ratio favored declining issues.

Surging COVID-19 Cases Reignite Fears

After ending last week in the red, markets came under pressure again on Monday on concerns of rising coronavirus cases. New COVID-19 cases have been on the rise across the United States, with the Delta variant spreading fast among those who are not vaccinated.

On average, the United States is recording 26,000 new cases daily over the last seven days through Sunday. The numbers have shot sharply from an average 11,000 new COVID-19 infections a day a month ago. Besides, cases have been on the rise across the world.

The rapid spread of the Delta variant once again ignited fears among investors who are worrying that economic recovery might once again slow down due to the rising cases. On Monday, markets came under pressure once again, with key stocks linked to global economic recovery taking a massive hit. Shares of The Boeing Company (BA - Free Report) plummeted 4.9%, while General Motors Company (GM - Free Report) declined 2.3%.

U.S. China Tensions Rise

Investors worried that tensions might further escalate between the Washington and Beijing after the Biden administration blamed China for Microsoft Exchange email server software hack earlier this year that compromised valuable data from tens of thousands of computers.

Also, Democratic senators were scheduled to announce a proposal to raise $14 billion annually by imposing taxes on imports from China and several other countries that are not taking enough steps to reduce emissions.

Yields Come Under Pressure 

Fears of the Delta variant spreading fast across the world brought yields under pressure, while Treasurys continued to rally. The 10-year Treasury yield hit a five-month low of 1.1% on fears of slowing economic growth.

No economic data was released on Monday.