The S&P 500 also edged down slightly from its record to 4,432.35 at the market’s close, while the tech-heavy Nasdaq was lifted 0.2 percent by strong earnings to 14,860.18.
Companies whose fates are tightly tethered to the recovery saw their stocks sink. American Airlines declined about 2.2 percent by market close, while United Airlines declined about 2.4 percent. Carnival and Royal Caribbean also fell about 2 percent.
As recently as early May, the delta variant of the coronavirus made up just 1 percent of U.S. cases. By the end of July, the fast-spreading variant accounted for 93.4 percent of new infections, according to the Centers for Disease Control and Prevention. Last week, recorded U.S. cases soared more than 42 percent nationally, according to The Washington Post’s tracker.
Aggressive moves by China to curb surges tied to the delta variant spooked investors and spurred volatility in oil markets. The country has reintroduced travel restrictions in some hard-hit areas, and last week health authorities in Beijing canceled all major events in the region for the rest of August.
China is one of the world’s most powerful economic engines and the biggest importer of crude oil, and its moves prompted concerns that the virus could again smother global travel and business activity.
Oil markets extended losses that began last week, with 7 percent declines for both major gauges. On Monday, West Texas Intermediate, the U.S. oil benchmark, shed more than 4.2 percent in early trading before recovering some losses. WTI was trading down 2.6 percent at the day’s end. Brent crude, the international oil benchmark, slumped nearly 2 percent to close at $69.31 per barrel.
Shares of Royal Dutch Shell and ExxonMobil both fell about 1 percent, while ConocoPhillips closed down almost 2 percent.
Wayne Wicker, chief investment officer at Vantagepoint Funds, said energy markets are under pressure from the rapidly rising infection rates for the delta variant.
“However, investors should keep in mind that energy is tied with real estate as the best-performing sectors year to date,” Wicker told The Post. “I would anticipate that as we move past the peak surge in this bout of covid, investors will return to a broader economic expansion story, which should support energy stocks later this year.”
Other commodities fell, with gold futures falling 2 percent and silver falling 3.6 percent.
Still, there are signs that the recovery is powering ahead despite the head winds. On Friday, the Labor Department reported that the economy added 943,000 jobs in July, its second consecutive monthly gain of more than 900,000. Corporate earnings have been upbeat, with 87 percent of S&P 500 companies coming in above expectations for revenue and earnings per share, according to FactSet.
But the Bureau of Labor Statistics reported Monday that job openings had hit a record in June, with more than 10.1 million open positions reflecting the unpredictable labor dynamics wrought by the pandemic. Layoffs and quits also rose.
Investors are looking toward consumer spending data later this week for further insight into how inflation is influencing the economy.
“There are warning signs of a sustained pace of higher inflation,” Greg McBride, chief financial analyst at Bankrate, said in commentary Monday. “Shelter costs do not yet reflect the reality of soaring home prices and the higher rents that result. And quarterly earnings calls have voiced a common theme — businesses are seeing higher costs and are having no problem passing those along to customers.”
Meanwhile, investors are watching as congressional leaders push to pass a $1.2 trillion infrastructure bill through the Senate this week. The bill, if approved by the House in September. would unleash a flood of funds to improve the nation’s roads, bridges, pipes, ports and Internet connections.
After the Senate takes up the infrastructure bill, which is widely expect to pass, focus will shift to a $3.5 trillion budget proposal by Democrats. Senate Majority Leader Charles E. Schumer (D-N.Y.) has pledged to tackle both issues before the Senate departs for a planned summer recess.
An alarming report Monday from the Intergovernmental Panel on Climate Change warning that humans have altered the environment at an “unprecedented” pace was largely shrugged off by investors. Climate change could slough $23 trillion off global gross domestic product by 2050, according to Swiss Re, a massive insurer of insurance companies.
As of July 9, the United States had already recorded eight weather disasters in 2021 in which losses topped $1 billion, according to the National Centers for Environmental Information. In 2020, there were 22.
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Delta fears drag down the Dow, oil markets - The Washington Post
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