Stocks begin 2021 with a sell-off, Dow drops more than 300 points
Stocks dropped on Monday, the first trading day of 2021, amid concerns about global coronavirus cases and the Georgia runoff elections.
The Dow Jones Industrial Average closed 382.59 points lower, or 1.3%, at 30,223.89. At one point, the Dow was down more than 700 points. Monday marked the first negative start to a year for the Dow since 2016.
The S&P 500 dipped 1.5% to 3,700.65.
The Nasdaq Composite also slid 1.5%, ending the day at 12,698.45.
Both the Dow and S&P 500 hit record highs at the open before turning lower.
It was the biggest one-day sell-off since Oct. 28 for the Dow and S&P 500, while the Nasdaq had its worst daily performance since Dec. 9.
Coca-Cola and Boeing were the worst-performing Dow components, falling 3.8% and 5.3%, respectively. Real estate stocks fell 3.2% to lead the S&P 500 lower.
Monday’s decline came as traders fretted over the growing number of coronavirus cases around the world and its potential impact on the global economic recovery.
In the U.K., Prime Minister Boris Johnson imposed a national lockdown on England to curb the spread of the new coronavirus variant. As part of the new restrictions, people can only leave their homes for essentials, work if they can’t from home and exercise. Most schools will also move to remote learning, including universities.
Wall Street was also keeping an eye on Georgia as the state prepares for Senate runoff elections on Tuesday, which could give Democrats a majority in the chamber.
“If the GOP wins just one seat, they will likely stonewall some of Biden’s more ambitious proposals, but a Democratic sweep of both elections might give the incoming administration free rein on their policy agenda,” wrote Jason Pride, CIO of private wealth at Glenmede.
John Stoltzfus, chief investment strategist at Oppeneheimer, said Monday the S&P 500 could fall by 10% if the Democratic candidates win the Georgia runoffs.
“It is thought by not just a few folks on Main Street as well as on Wall Street that if tomorrow’s run-off results in a sweep for the Democrats — providing them with control of the Senate as well as the House — that it would bode ill for business with the likelihood that corporate tax rates could rise substantially,” said Stoltzfus.
Reference: CNBC
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