Wall Street Drops Amid Pandemic, Afghanistan Worries
NEW YORK (AP) — Stocks fell in morning trading Monday, amid worries about rising coronavirus infections in the U.S. and around the globe, as well as geopolitical concerns out of Asia.
The S&P 500 index fell 0.5% as of 11:30 a.m. Eastern. The Dow Jones Industrial Average fell 105 points, or 0.3%, to 35,410 and the Nasdaq composite fell 1.1%. The Russell 2000 index of small company stocks was down 0.6%.
Investors shifted money into sectors traditionally considered lower risk, including utilities and companies that make food and personal goods. Technology and communication companies, along with the travel sector and companies providing in-person services had some of the worst losses.
Shares of Tesla fell 5% after the U.S. government announced a formal investigation into the company’s automated driving features, following a series of collisions with parked vehicles.
Data out of China showed the global coronavirus pandemic continues to hurt economies around the world. Chinese industrial production and retail sales both rose last month, but at a far weaker pace than what economists had expected.
China’s economy is suffering from supply chain issues, where manufactured goods that would typically be on their way to foreign markets have either remained unfinished or stuck in shipping containers. The pandemic has made hiring workers harder as well.
The collapse of the Afghanistan government over the weekend was also on investors’ minds. While the economy of Afghanistan is small, the country is located in a delicate part of the world, sandwiched between the economic giants of South and East Asia and the oil-rich Middle East.
Oil prices fell 1.4% and weighed down energy companies. Exxon Mobil fell 1.6%.
Bond yields fell and pulled banks lower. They rely on higher yields to charge more lucrative interest on loans. The yield on the 10-year Treasury fell to 1.25% from 1.29% late Friday. Bank of America fell 1.4%.
Also dampening investors’ optimism was the University of Michigan consumer sentiment index from Friday, which fell to 70.2 from its previous level of 81.2 in July. That was the largest drop in sentiment since April 2020, when the pandemic took its initial grip on the country.
The unexpectedly bad reading was almost entirely due to the spread of the delta variant of the coronavirus, which has caused hospitals to fill up with unvaccinated patients across the U.S.
By AP reporter Damian J. Troise