Wall Street Opens As Covid Concerns Drive Rotation Out Of Value; Dow Down 110 Pts

  • Posted on July 12, 2021
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  • By FC Team
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Investing.com -- U.S. stock markets opened the week mixed on Monday, as concerns about the global spread of the Covid-19 virus encouraged further rotation out of value stocks and back into the 'growth-oriented' stocks that benefited so much from the pandemic last year.Even so, they remained close to record highs at the start of a week that will feature testimony from Federal Reserve chairman Jerome Powell, U.S. inflation data for June and the start of the second-quarter earnings season.By 9:35 AM ET (1335 GMT). the Dow Jones Industrial Average was down 113 points, or 0.3%, at 34,757 points, while the S&P 500, which had finished last week at a record high, was down 0.1%. The Nasdaq Composite, which likewise closed at a record high on Friday, extended that streak with a 0.3% gain. The U.S. recorded its highest number of new Covid-19 cases in over two months at the weekend, prompting fears that the highly-transmissible delta strain of the virus may yet derail economic reopening, especially in those state with low vaccination rates. The U.S. vaccination rate has tailed off sharply since April and is currently running at one-tenth of its peak rate, despite the fact that less than half of the adult population is fully vaccinated.For many, though, that's still only a cloud on the horizon that may or may not blow their way. The gradual return to normal life was illustrated at the weekend by Disney 's new blockbuster Black Widow raking in $218 million at the box office, including over $150 million from reopened movie theaters. Analysts were more impressed by the $60 million it made through the Disney+ streaming channel, where it earns higher margins. Walt Disney (NYSE:DIS)stock outperformed with a 0.9% gain.Virgin Galactic (NYSE:SPCE) stock followed its founder Richard Branson in returning to earth after a brief stratospheric rise in the overnight session. The stock fell 8.7% after investors took profit on a trade driven by anticipation of the company's first full-crew test flight on Sunday, leaving it some 25% below the record high it hit after Branson announced the flight date earlier in the year.Tesla (NASDAQ:TSLA)stock rose 2.7% as some bet on a speedy exoneration for CEO Elon Musk at a much-delayed trial in a Delaware Court, where he faces charges of defrauding Tesla investors by overpaying for solar panel business SolarCity back in 2016. Chinese American Depositary Receipts remained under pressure after further signs of the Communist Party taming the country's big Internet firms. Didi Global (NYSE:DIDI) ADRs fell 3.1% after the Cyberspace Administration of China ordered the removal of 25 more apps owned by the ride-hailing giant from local app stores. The company acknowledged this would hurt its revenue in China. Meanwhile, Tencent Music Entertainment ADRs (NYSE:TME) fell 3.4% to their lowest in five weeks after reports that antitrust regulators want it to give up certain exclusive rights to music.Tencent Holdings (OTC:TCEHY), TME's largest shareholder, also fell 2.5% after antitrust regulators stopped it from orchestrating a merger between two of its affiliates, on the grounds that it would create too much concentration in the videogaming sector.

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