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Dow Jones Plummets Nearly 900 Points As Covid-19 Fears Resurface; Energy Sector In Correction

The Dow Jones Industrial Average sold off heavily in today’s market on resurgent Covid-19 fears. The S&P 500 also traded near its lows of the day while the Nasdaq composite sold off as well. The Dow led on the downside with a loss of nearly 900 points.

A resurgence in Covid-19 cases in many highly-vaccinated countries is feared to hamper economic growth. In the U.S., coronavirus cases jumped 37% over the last seven days to 203,082, according to Worldometer. However, nearly all new cases are among people who have not been inoculated.

Travel, consumer and energy stocks were among the worst performers on Monday. Energy Select Sector SPDR (XLE) tanked 4.4%. The ETF is now down 18% from its prior high and has now entered correction territory. Should the sector sell off as much as 20%, it would count as a bear market.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 33826.38 -861.47 -2.48
S&P 500 (0S&P5) 4243.19 -83.97 -1.94
Nasdaq (0NDQC ) 14241.18 -186.06 -1.29
Russell 2000 (IWM) 210.86 -4.09 -1.90
IBD 50 (FFTY) 41.99 -0.06 -0.14
Last Update: 3:12 PM ET 7/19/2021

This is officially the third correction in 2021 for the energy sector. Oil prices plunged on Monday, continuing a rough sell-off in recent weeks caused by a breakdown in talks between OPEC+ members.

On Sunday, the OPEC+ group of oil producers agreed to increase collective production by 400,000 barrels per day starting in August, and will continue expanding at that pace through September 2022. West Texas intermediate oil prices lost 7.6%, falling to $66.31 a barrel midday.

Dow Jones In The Stock Market Today

About an hour before the close, the Nasdaq held a loss of 1.4%. Meanwhile, the S&P 500 traded 2.1% lower. The Dow Jones industrials fell 2.6%, or nearly 900 points, leading on the downside. The small-cap Russell 2000 index slumped 1.6%. Volume was running higher on both the NYSE and Nasdaq vs. the same time on Friday.

Stocks underperforming in the Dow Jones on Monday included tech giant Apple (AAPL), which sold off almost 3% Monday. Share are on pace to extend a losing streak to three sessions. The stock hit an all-time high last week of 150. Apple stock is extended past the 5% buy zone from a 137.17 entry in a cup base, according to IBD MarketSmith chart analysis.

Meanwhile, restaurant giant McDonald’s (MCD) is trading below a 238.28 buy point in a flat base, according to IBD MarketSmith chart analysis, after last week’s brief breakout attempt. Shares were down nearly 3.4% Monday.

The Innovator IBD 50 ETF (FFTY) miraculously bucked the trend and only fell 0.1%. Shares of the ETF are still solidly below the 200-day moving average after a heavy sell-off last week. Stocks leading the downside in the index included Global-E Online (GLBE) and investment banker Jefferies (JEF).

Jefferies stock triggered the 7%-8% sell rule on Monday as shares gapped down and fell 4.4% in afternoon trading. The stock entered the sell zone after breaking out near the end of June from a 34.96 consolidation.

Meanwhile, Alphabet (GOOGL), another fellow IBD 50 stock, fell below its 10-day moving average but remains inside the 5% buy zone of a 2,431.48 buy point.

On Friday, IBD downgraded its market outlook to “uptrend under pressure.” This means that investors should be more conservative when initiating new stock positions. Also, consider taking profits where possible and be extra picky about taking on more risk at this time.

Follow Rachel Fox on Twitter at @foxonstocks for more Dow Jones and market commentary.

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