Wall Street plunges on fears of more global lockdowns, Dow falls 850 points



Stocks fell sharply on Monday as fears about the worsening coronavirus as well as uncertainty on further fiscal stimulus rattled traders.

The Dow Jones Industrial Average dropped 850 points, or just over 3 percent. The S&P 500 lost 2.5 percent, while the Nasdaq Composite fell 2.3 percent. The major stock averages were all coming off their third consecutive losing week, the market’s longest weekly slide since 2019.

“It seems like the biggest reason for the decline in most global stock markets is the concern that tighter virus restrictions in Europe will result from the new spike in Covid cases now that the colder weather is upon us,” Matt Maley, chief market strategist at Miller Tabak, said in a note on Monday.

The U.K. is reportedly considering another national lockdown to stop an increase in coronavirus cases. The country’s benchmark FTSE 100 dropped more than 3 percent on the fear. Stocks that would be hit hardest from another lockdown declined on Wall Street, with shares of Carnival Corp. down by 4 percent Monday morning. Southwest Airlines and Delta Air Lines fell 4.6 percent and 7.2 percent, respectively.

In addition, negotiations for a second stimulus bill could become more complicated after the passing of Supreme Court Justice Ruth Bader Ginsburg, which could lead to a bitter nomination process ahead of the election. President Donald Trump said he would nominate someone this week to take Ginsburg’s seat. Republicans and Democrats have been in a stalemate since July after provisions from the previous stimulus bill expired.

Shares of Nikola automotive company dropped 20 percent after the company said founder Trevor Milton is stepping down as executive chairman and board member. The move comes after short-selling firm Hindenburg Research accused the company of fraud. Shares of GM, which recently took an 11 percent stake in Nikola, fell 5.6 percent Monday.

Bank stocks also sold off across the board, after a report that found a number of global banks allegedly moved illicit funds. A new investigation by BuzzFeed and the International Consortium of Investigative Journalists found the banks’ internal compliance officers flagged a total of more than $2 trillion in transactions between 1999 and 2017 as possible money laundering or other criminal activity. Shares of Deutsche Bank dropped 8.3 percent, while JPMorgan Chase fell more than 2.8 percent.



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