(RTTNews) - Following the lackluster performance seen in the previous session, stocks moved sharply lower during trading on Monday. With the steep drop on the day, the major averages added to the losses posted last week.
The major averages climbed off their worst levels in afternoon trading but remained firmly negative. The Dow plunged 650.19 points or 2.3 percent to 27,685.38, the Nasdaq slumped 189.34 points or 1.6 percent to 11,358.94 and the S&P 500 tumbled 64.42 points or 1.9 percent to 3,400.97.
The sell-off 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.
Meanwhile, President Donald Trump continued to downplay the pandemic in a post on Twitter, claiming the jump in new coronavirus cases is a "Fake News Media Conspiracy."
"Cases up because we TEST, TEST, TEST. A Fake News Media Conspiracy. Many young people who heal very fast. 99.9%. Corrupt Media conspiracy at all time high. On November 4th., topic will totally change. VOTE!" Trump tweeted.
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 turned in some of the market's worst performances on the day, with the NYSE Arca Airline Index plunging by 5.5 percent.
Significant weakness was also visible among energy stocks, which moved sharply lower along with the price of crude oil. Crude for December delivery tumbled $1.26 to $38.89 a barrel.
Reflecting the weakness in the energy sector, the NYSE Arca Oil Index slumped by 4 percent, the Philadelphia Oil Service Index dropped by 3.5 percent and the NYSE Arca Natural Gas Index fell by 3.4 percent.
Housing, computer hardware software chemical stocks also showed notable moves to the downside amid broad-based weakness 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 also moved to the downside on the day. While the German DAX Index plunged by 3.7 percent, the French CAC 40 Index slumped by 1.9 percent and the U.K.'s FTSE 100 Index fell by 1.2 percent.
In the bond market, treasuries 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, fell by 4 basis points at 0.801 percent.
Trading on Tuesday may be impacted by reaction to reports on durable goods orders, home prices and consumer confidence.
On the earnings front, 3M (MMM), BP (BP), Caterpillar (CAT), Crocs (CROX), Eli Lilly (LLY), Harley-Davidson (HOG), JetBlue (JBLU), Merck (MRK), Pfizer (PFE), and Xerox (XRX) are among the companies due to report their quarterly results before the start of trading on Tuesday.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.