(OPINION) – U.S. stocks fell aggressively Monday on concern a rebound in Covid-19 cases would slow global economic growth. The selling picked up as the session continued and the Dow Jones Industrial average was currently headed for its biggest drop of the year.
The Dow dropped 777 points, or 2.3%, exceeding a 2% decline seen in late January. The S&P 500 fell 1.5% with energy and industrial sectors as the worst performers. The Nasdaq Composite lost almost 1%. The 10-year Treasury yield fell to a new five-month low of 1.19%, further exacerbating fears about the slowing economy. Crude oil dropped 5%.
“You have two concerns coming together this morning: concerns about market technicals and concerns about growth,” Mohamed El-Erian, chief economic adviser of Allianz and former CEO of PIMCO said on CNBC’s “Squawk Box” Monday. “That’s what all the asset classes are telling you this morning.”
Covid cases have rebounded in the U.S. this month with the delta variant spreading among the unvaccinated. The U.S. is averaging nearly 30,000 new cases a day in the last seven days ending Friday, up from a seven-day average of around 11,000 cases a day a month ago, according to CDC data. Cases were already flaring up around the world because of the delta variant. MORE