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James Hyerczyk
US Stock Market

The major U.S. stock indexes finished lower on Monday as concerns about new coronavirus restrictions and lockdowns in Europe and possible delays in fresh fiscal stimulus from Congress raised fears the U.S. economy faces a rockier road to recovery than previously hoped for.

Bad news for broad-based investors, in contrast to last week’s downturn, declines were led by value-oriented sectors such as industrials, energy and financials as opposed to technology stocks.

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In the cash market on Monday, the benchmark S&P 500 Index settled at 3281.06, down 38.41 or -1.13%. The blue chip Dow Jones Industrial Average finished at 27147.70, down 509.72 or -1.82% and the technology-driven NASDAQ Composite closed at 10778.80, down 14.48 or -0.13%.

At its worst, the Dow was down as much as 900 points while the S&P 500 ended down less than 9% from its record high on September 2 after paring losses that had pushed the benchmark nearly into corrective territory. This year’s rally was led by a number of technology heavyweights, and the current correction is being fueled by the same shares with the NASDAQ Index down over 10% from its top and officially in a correction.

Negative Factors Affecting the Trade

Airline, hotel and cruise companies tracked declines in their European peers as Britain signaled the possibility of a second national lockdown. Europe’s travel and leisure index marked its worst two-day drop since April.

A new round of business restrictions would threaten a nascent recovery and further pressure equity markets. The first lockdowns in March led the S&P 500 to suffer its worst monthly decline since the global financial crisis.

The death of U.S. Supreme Court Justice Ruth Bader Ginsburg also appeared to make the passage of another stimulus package in Congress less likely before the November 3 presidential election, sparking large declines in the healthcare sector.

Ginsburg’s death could lead to a tie vote when the Supreme Court hears a challenge to the constitutionality of ACA in November.

Congress has for weeks remained deadlocked over the size and shape of another coronavirus-response bill, on top of the roughly $3 trillion already enacted into law.

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Stocks on the Move

The largest gainer on the NASDAQ 100 was Zoom Video Communications Inc, which rose 6.8% on the prospect that fresh lockdowns would spur greater use of the product.

JPMorgan Chase & Co and Bank of New York Mellon Corp fell 3.1% and 4.0%, respectively, on reports that several global banks moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origins of the money.

For a look at all of today’s economic events, check out our economic calendar.

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