Investors Shift To Bonds Worldwide As COVID Fears Intensify
Resurgent pandemic worries are knocking stocks lower from Wall Street to Sydney earlier in the week, fueled by fears that faster-spreading variants of the virus may upend the economy’s strong recovery, Stan Choe, Alex Veiga and Damian J. Troise reported for the Associated Press (AP).
The S&P 500 was 2% lower in afternoon trading, after setting a record just a week earlier. In another sign of worry, the yield on the 10-year Treasury touched its lowest level in five months as investors scrambled for safer places to put their money.
The Dow Jones Industrial Average was down 896 points, or 2.6%, at 33,791, as of 12:42 p.m. Eastern time. The Nasdaq composite was 1.4% lower. Airlines and stocks of other companies that would get hurt the most by potential COVID-19 restrictions were taking some of the heaviest losses, similar to the early days of the pandemic in February and March 2020. Mall owner Simon Property Group fell 5.4%, and cruise operator Carnival lost 5.2%.
The drop also circled the world, with several European markets sinking roughly 2.5% and Asian indexes down a bit less. The price of benchmark US crude, meanwhile, sank more than 6% after OPEC and allied nations agreed on Sunday to eventually allow for higher oil production this year.
Financial markets have been showing signs of increased concerns for a while, but the U.S. stock market had remained largely resilient. The S&P 500 has had just two down weeks in the last eight, and the last time it had even a 5% pullback from a record high was in October. Several analysts pointed to that backdrop of high prices and very calm movements for weeks while dissecting Monday’s drop.