U.S. stocks fell Tuesday, losing more than 300 points on the Dow Jones Industrial Average as investors began to lose faith in the resurgence of the economy. The Dow (DJIA) closed off 308 points at 32,423 for a loss of almost 1%. The S&P 500 (SPX) lost 30 points, trading down 0.76% to end the day at 3,910 while the tech heavy Nasdaq (COMP) lost more than 1%, or 149 points to close at 13, 227.
Growing concerns about Covid-19 variants in the U.S. is leading the Biden administration to caution states against easing any restrictions. Meanwhile, in Europe, the AstraZeneca vaccine roll-out has gone poorly and led to additional lockdowns. Germany is considering extending its lockdown until April 18th while France initiated a new lockdown over the weekend.
Shares of travel related companies including Carnival (CCL) traded off nearly 8% at $25.34 while and Norwegian cruise lines (NCLH) fell more than 7% at $26.56. Royal Carribean (RLC) lost almost 6% to trade down $5.26 at $83.65 per share. United Airlines (UAL) shares fell roughly 7%, as did American Airlines (AAL). Delta (DAL) lost roughly 5%. Marriott (MAR) traded down more than 6%.
Also hit hard, share of Gap, which fell more than 7% to trade at $28.02. The CEO Sonia Syngal said in an interview earlier in the month that the company was “quite optimistic” and “we do think there’s going to be this peacocking effect that happens, as people emerge from Covid” as they effectively dress to impress others.
Thus, any suggestion that the economy won’t emerge from Covid this spring would have an effect on travel and clothing retailers.
Meanwhile, shares of dow component Caterpillar (CAT) traded down nearly 4%. CAT is an important barometer for global economic activity and further suggests investors are worried.