Stocks fall as COVID-19 fears rattle travel, leisure companies

The stock market took steep losses Monday as concerns about the rebound from the coronavirus recession rattled investors. 

The Dow Jones Industrial Average closed with a loss of 725 points Monday, falling 2.1 percent, largely due to losses among airlines, cruise lines, construction firms, energy producers and financial services companies. The S&P 500 fell 1.6 percent and the Nasdaq fell 1.1 percent, also taking losses in the same sectors.

Monday’s selloff, the steepest since January, appeared to be driven by concerns about COVID-19 surging and derailing the recovery from the pandemic-driven recession. Companies taking the biggest losses Monday are among those most dependent on resurgent consumer activity, travel, large gatherings and social events.

Boeing, Dow, American Express, Goldman Sachs, Marriott, Carnival Cruise Line, and Marathon Oil were among the companies taking the heaviest losses Monday and were all down between 4 and 7 percent at the depth of the sell-off.

At the same time, consumer staples, big box stores, pharmaceutical and medical supply companies all rallied on the prospect of higher case levels and retreating consumers. Peloton Interactive, Moderna, Etsy, Quest Diagnostics and Kroger all posted gains Monday morning.

“Fears over peak economic data and a resurgence in COVID cases has the market on edge today. Of course, don’t forget that the S&P 500 hasn’t had a 5% correction since October, so you could say we are more than due for some turbulence,” said Ryan Detrick, chief market strategist for LPL Financial in a Monday statement.

Stocks rose steadily in the start of 2021 as the Biden administration pushed nearly $2 trillion in stimulus and accelerated the pace of COVID-19 vaccinations. While the Dow, Nasdaq and S&P are all near record highs, Wall Street has hit more turbulence in recent months—first due to inflation fears and now concerns about the sturdiness of the global recovery.

“Today’s market drop felt unusually jolting after months of quiet markets.  But there’s been a steady rotation into stay-at-home stocks over the past few weeks with economic growth worries replacing runaway inflation concerns. The Delta variant could be the straw that breaks the camel’s back,” wrote Lindsey Bell, chief investment strategist at Ally Invest, in an analysis.

Updated at 6:26 p.m.