Extending the pullback off record highs seen last Friday, stocks have moved sharply lower in morning trading on Monday. The major averages have all shown significant moves to the downside on the day.
Currently, the major averages are posting steep losses, just off their lows of the session. The Dow is down 308.72 points or 1 percent at 29,870.33, the Nasdaq is down 191.08 points or 1.5 percent at 12,546.56 and the S&P 500 is down 62.26 points or 1.7 percent at 3,647.15.
Concerns about a new coronavirus strain in the U.K. have contributed to the sell-off on Wall Street, with the variant said to be 70 percent more infectious than the original strain.
The news of the new strain led Canada as well as several European countries, including Germany, France, Italy and the Netherlands, to order a suspension of flights from Britain.
More than 16 million Britons are now required to stay at home as a full lockdown came into force in London and the southeast of England.
The worries about the new coronavirus strain have offset news that Congressional leaders have reached an agreement on a new $900 billion relief package.
The bill will purportedly provide more federal assistance to small businesses, healthcare providers, and the unemployed and includes direct payments worth up to $600 per adult and child.
“As the American people continue battling the coronavirus this holiday season, they will not be on their own,” Senate Majority Leader Mitch McConnell, R-Ken., said in a post on Twitter.
He added, “Congress has just reached an agreement. We will pass another rescue package ASAP. More help is on the way.”
House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., expressed support for the bill but said they plan to push for more relief once President-elect Joe Biden is sworn in.
Airline stocks have shown a substantial move to the downside on the day, dragging the NYSE Arca Airline Index down by 4.2 percent to its lowest intraday level in nearly a month.
A steep drop by the price of crude oil is also weighing on energy stocks, with crude for January delivery tumbling $1.77 to $47.33 a barrel amid concerns about the outlook for demand.
Reflecting the weakness in the energy sector, the NYSE Arca Oil Index is down by 3.3 percent, the NYSE Arca Natural Gas Index is down by 2.5 percent and the Philadelphia Oil Service Index is down by 2.4 percent.
Pharmaceutical, chemical and healthcare stocks are also seeing considerable weakness, while banking stocks are among the few groups bucking the downtrend.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index edged down by 0.2 percent, while China’s Shanghai Composite Index advanced by 0.8 percent.
Meanwhile, the major European markets have all moved sharply lower on the day. While the U.K.’s FTSE 100 Index has plunged by 2.2 percent, the French CAC 40 Index and the German DAX Index are down by 3 percent and 3.1 percent, respectively.
In the bond market, treasuries have given back ground after an initial jump but remain modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.3 basis points at 0.925 percent.
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