Due to virus worries weigh on the S&P 500 and Dow, oil equities drive the indexes down

On Monday, the S&P and Dow indices fell from record highs as fears over mounting COVID-19 cases weighed on oil and other growth-sensitive industries. Energy stocks, which were down 1.2 percent, took the brunt of the selling as crude prices fell as a rise in coronavirus infections, notably in China, stoked worries of further restrictions that might stifle demand. Eight of the 11 major S&P sectors declined, with consumer staples and financials leading the way up.

Miners were also hampered by sharp drops in copper and gold prices due to fears about Chinese demand. The commodities sector was down 0.3 percent, while Freeport-Mcmoran Inc, the world’s largest publicly listed copper miner, was down 1%.”The risk is that we may see higher (interest) rates, as well as a potential slowdown due to COVID-19, which is a worst-case scenario,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
After solid jobs data pushed the S&P 500 and the Dow Jones to new highs last week, investors were looking for more triggers to propel the market higher. In the midst of growing inflation and job market growth, a gathering of Federal Reserve policymakers in Jackson Hole, Wyoming, later this month is likely to offer more insight on the central bank’s probable plan to shrink its stimulus programme. The focus will also be on a $1 trillion bipartisan infrastructure measure in the United States, which may be voted on as early as Tuesday after specifics of the bill earned Senate backing over the weekend.

The Dow Jones Industrial Average was down 79.55 points, or 0.23 percent, at 35,128.96 minutes before ET, the S&P 500 was down 5.31 points, or 0.12 percent, at 4,431.21, and the Nasdaq Composite was up 17.41 points, or 0.12 percent, at 14,853.17 minutes before ET. Over the past two weeks, a fantastic earnings season has seen U.S. equities jump to new highs, as numerous large corporations’ results surpassed expectations, reinforcing confidence in a post-COVID economic rebound this year.

According to Refinitiv’s IBES statistics, analysts projected S&P 500 businesses to boost their profits by 93.1 percent in the second quarter. So far, 87.4 percent of the index’s 443 businesses that have reported profits have exceeded analyst estimates, the greatest percentage on record. Sanderson Farms Inc jumped 7.2 percent after agreeing to be purchased for $4.53 billion by commodities trader Cargill Inc and investment company Continental Grain Co at a time when meat prices are skyrocketing owing to high demand. Tyson Foods Inc gained 7.8% after the meat processor boosted its sales outlook for fiscal 2021.

On the NYSE, decliners outweighed advancers by 1.64-to-1, while on the Nasdaq, decliners outpaced advancers by 1.02-to-1. The S&P 500 index hit 24 new 52-week highs and one new low, while the Nasdaq hit 62 new highs and 46 new lows.