Covid Variant Fear Grips Wall Street; Dow Jones Has Biggest One-Day Point Drop Since October; Media & Tech Largely Spared – Update

AP Photo/Richard Drew

UPDATED with results at close of trading. The stock market is rife with investor fears about Covid-19 wreaking fresh havoc on the economy.

The Dow Jones Industrial Average plunged 725.81 points, a bit more than 2%, slipping below 34,000 for the first time in nearly a month. It was the index’s worst day of 2021 and its biggest single-day point drop since last October.

The S&P 500 pulled back by 1.6%, and the Nasdaq fell by nearly 1.1%.

Amid the gloom, media and tech stocks escaped without major damage, apart from the beleaguered exhibition sector. Quarterly earnings season is kicking off Tuesday, with Netflix reporting its second-quarter results. The streaming giant was among the few stocks in positive territory, rising a fraction to finish at $532.28.

After the U.S. showed steady progress through the spring in its fight against the coronavirus pandemic, infection rates have spiked in much of the country. Vaccination rates, meanwhile, have leveled off, leaving many Americans vulnerable to the Delta variant. That combination has sparked worries of new lockdowns or other restrictions on commercial activity.

Los Angeles has just restored indoor mask rules and some school districts already have said they will start the upcoming year with masks in place. Key international territories like the UK are confronting similar circumstances, leaving their viability for business in question, and large parts of Asia and South America remain significantly impaired by the pandemic.

Travel has been rebounding in the U.S., leading to optimism earlier this summer that the worst was behind the country. But the monkey wrench of the variant prompted many investors to flee stocks like Boeing and Marathon Oil, each of which dropped more than 5% today. Airlines and cruise operators also have taken it on the chin, as have large financial institutions.

There also were plenty of red numbers in the media and entertainment sector, but the damage was fairly limited. So-called “shutdown” stocks fared best, with Charter Communications and smart-TV maker Vizio climbing a fraction. Roku, which has seen is active accounts surge during the pandemic, gained nearly 2% on the day.

Exhibition, already under scrutiny because of major shifts of feature films toward streaming platforms, extended its recent pullback. Shares in AMC Entertainment, Cinemark, National CineMedia and Imax dipped between 3% and 6%.

The Walt Disney Company, one of the media companies with the greatest sensitivity to virus trends given its theme park and live sports businesses, saw its shares give back almost 4%. After ending the day at $172.95, they are now in negative territory for 2021 to date.

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