(RTTNews) - Following the lackluster performance seen in the previous session, stocks have moved sharply lower in morning trading on Monday. The major averages have all shown significant moves to the downside on the day.
In recent trading, the major averages have fallen to new lows for the session. The Dow is down 586.32 points or 2.1 percent at 27,749.25, the Nasdaq is down 119.73 points or 1 percent at 11,428.55 and the S&P 500 is down 57.13 points or 1.7 percent at 3,408.26.
The weakness on Wall Street comes amid concerns about a resurgence in coronavirus cases, with new infections reaching a new record high last Friday.
Data from John Hopkins University showed that new coronavirus cases reached a new high of 83,757 last Friday and topped 83,000 again on Saturday.
In an interview with CNN on Sunday, White House chief of staff Mark Meadows argued that the pandemic could not be controlled and suggested the administration would focus on vaccines and therapeutics.
The spike in new coronavirus cases comes as lawmakers in Washington appear to remain at an impasse over a new stimulus bill.
Negotiations continue, but traders appear pessimistic that an agreement on a new relief package will be reached before next week's elections.
Adding to the negative sentiment, the Commerce Department released a report showing an unexpected slump in new home sales in the month of September.
The report said new home sales tumbled by 3.5 percent to an annual rate of 959,000 in September after jumping by 3 percent to a revised rate of 994,000 in August. The pullback surprised economists, who had expected new home sales to surge up by 2.8 percent.
"We expect the pace of sales to moderate further in the fourth quarter," said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.
She added, "While strong demand and low mortgage rates are supportive of home sales, the resurgence in Covid-19 cases, a recovery that may be shifting into reverse and a weak labor market pose downside risks."
Airline stocks have shown a substantial move to the downside on the day, dragging the NYSE Arca Airline Index down by 3.9 percent.
Considerable weakness has also emerged among energy stocks, which are moving sharply lower along with the price of crude oil. Crude for December delivery is tumbling $1.32 to $38.53 a barrel.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 3.4 percent, the NYSE Arca Oil Index is down by 3 percent and the NYSE Arca Natural Gas Index is down by 2.9 percent.
Computer hardware, housing and transportation stocks are also seeing notable weakness amid a broad based sell-off on Wall Street.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index edged down by 0.1 percent, while China's Shanghai Composite Index slid by 0.8 percent.
The major European markets have also moved to the downside on the day. While the German DAX Index has plunged by 3.2 percent, the French CAC 40 Index is down by 1.4 percent and the U.K.'s FTSE 100 Index is down by 0.6 percent.
In the bond market, treasuries have moved higher after ending the previous session nearly unchanged. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.3 basis points at 0.808 percent.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
