U.S. stocks fell aggressively Monday on concern a rebound in Covid cases would slow global economic growth. The selling picked up though early afternoon and the Dow Jones Industrial average was headed for its biggest drop of the year. The Dow dropped 920 points, or 2.7%, exceeding a 2% decline in late January. The S&P 500 fell 2.1% with energy and industrial sectors as the worst performers. The tech-dominated Nasdaq Composite lost 1.5%. The small-cap Russell 2000 briefly dropped into correction territory, falling 10.7% from its 52-week high on March 15.
The 10-year Treasury yield fell to a new five-month low of 1.19%, exacerbating fears about the slowing economy. Crude oil dropped more than 6%. 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.
The Cboe Volatility Index surged 6 points to as high as 24.8 amid the broad market sell-off, hitting the highest level since May. The VIX looks at prices of options on the S&P 500 to track the level of fear on Wall Street. Airlines got hit, with shares of United, Delta and American sinking more than 5%. Along with shares of cruise lines and airlines, key stocks linked to the global economy pulled back. Boeing fell 5%, and General Motors and Caterpillar dropped more than 2%. Oil prices fell on fears of slowing growth and as OPEC+ agreed to begin phasing out production cuts. Energy stocks were among the worst performers in the market, with with ConocoPhillips off by more than 3%. Exxon Mobil lost 3%. WTI crude shed 6% to about $68.12 a barrel.