Stocks are opening broadly lower on Wall Street as concern grows about new travel restrictions on the United Kingdom because of a new strain of coronavirus that could spread more rapidly. The S&P 500 gave up 0.9% in the first few minutes of trading Monday, putting the benchmark index on track to fall for a second day after setting its record high on Thursday. The declines came despite approval in Congress over the weekend of a long-awaited stimulus package for the economy. Energy stocks fell along with crude oil prices. Banks were in the green after getting permission to resume stock buybacks.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Global shares retreated Monday as worsening coronavirus outbreaks overshadowed news that U.S. lawmakers finally set a deal on more support for American families and businesses.
Markets fell in Paris, London, Frankfurt and Tokyo but rose in Shanghai. U.S. futures were lower.
Concern about the coronavirus outbreak grew, as several European Union nations banned flights from the U.K. and others considered similar precautions aimed at preventing a new strain of the virus from gaining a strong foothold on the continent. That overshadowed the expected passage by the U.S. Congress of the nearly $1 trillion COVID-19 economic relief package later Monday.
Most investors had already factored in expectations for the fresh stimulus, Jingyi Pan of IG said in a commentary.
“The tentative accord on the approximate $900 billion coronavirus stimulus deal, having been the talk of the town for weeks, brought forth little fresh enthusiasm for markets,” Pan said.
Germany’s DAX and the CAC 40 in Paris fell 3.1%. In Britain, the FTSE 100 gave up 2.5% to 6,436.30.
U.S. futures also weakened, with the contract for the S&P 500 down 1.7%. The futures for the Dow industrials dropped 1.6%.
The British pound, sometimes called the pound sterling, fell 1.8% against the dollar, to $1.3274, down from $1.3522 late Friday.
“Combined with European border closures and the UK Health Secretary using phrases such as ‘out of control’ to describe the new strain, Sterling is, unsurprisingly, under pressure today,” Jeffrey Halley of Oanda said in a commentary.
In Asia, flaring COVID-19 outbreaks have led authorities to impose lockdowns or other restrictions in Australia and Thailand.
Tokyo’s Nikkei 225 index lost 0.2%, regaining some of its earlier losses after the Cabinet approved a record annual budget of 106.6 trillion yen ($1.03 trillion) for the coming fiscal year, which begins April 1.
In Hong Kong the Hang Seng declined 0.7% and South Korea’s Kospi recovered from early losses, gaining 0.2%. The Shanghai Composite index gained 0.8%.
The U.S. stimulus agreement is includes temporary $300 per week supplemental jobless benefits and $600 direct stimulus payments to most Americans, along with a fresh round of subsidies for hard-hit businesses and funding for schools, health care providers, and renters facing eviction.
The final agreement was reached after a breakthrough over Federal Reserve emergency powers was resolved by the Senate’s top Democrat and a senior conservative Republican.
Wall Street retreated on Friday, with the S&P 500 losing 0.4% a day after it and other major indexes breached record highs.
The pandemic’s chokehold on the economy has worsened, with reports showing growing numbers of workers applying for jobless benefits and weaker than expected sales for retailers.
Wall Street’s hope is that the stimulus for the economy might help carry it through a tough winter, until the widespread rollout of COVID-19 vaccines might bring relief.
But it will be months before most people can get the shots, and the pandemic is likely to do even more damage in the interim.
In the bond market, the yield on the 10-year Treasury slipped to 0.91% from 0.94% late Friday.
U.S. benchmark crude oil lost $2.01, or 4.1% to $47.23 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, declined $1.80 to $50.46 per barrel.