A broad market plunge started the week off with the Dow Jones Industrial Average plummeting 750 points, or 2.2% in trading Monday morning — with department store stocks noticeably dropping.
Concerns over rising coronavirus infection cases worldwide, given the more contagious Delta variant making its way through the US, are spooking investors. The US added over 39,000 coronavirus cases as of July 16, according to data from the Centers for Disease Control, three times higher than the 13,707 cases reported on June 16.
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The seven-day moving average is over 29,000 cases; areas of the US with high levels of community spread include Florida, Utah, Nevada and Missouri, CDC data shows.
There have been more than 606,000 deaths from COVID-19 in the US so far.
By Monday mid morning, the Nasdaq was off 188 points to 14,236.30, and the S&P index lost about 71 points, or 1.6%, to 4,256.42. The Dow was recently at 33,936.39.
Among the biggest declines seen Monday in the retail sector, shares in Macy’s fell 4.9% to $16.11, Kohl’s shares were down 2.5% to $48.18, Nordstrom shares shed 3.7% to $31.48, and Simon Property Group shares fell 5% to $118.22.
Earnings season takes off this week with reports expected from some high profile companies, including Netflix on Tuesday and Johnson & Johnson on Wednesday.
Despite recent rebounds in sales and earnings among many companies in the retail space including Nike and Puma, inflation concerns are in play surrounding the impact rising prices will have on sales. Last week, the consumer price index rose 5.4% in June as inflation grew at its fastest pace since August 2008. While transportation-related costs accounted for the bulk of the increases — with prices for car rentals, used cars, gas, and airfare all surging tremendously from last year — shoes were also a notable culprit, as footwear prices jumped 6.5% year-over-year.
Women’s footwear prices saw the strongest spike, up 7%, the sharpest advance in nearly 32 years, according to the Footwear Distributors and Retailers of America.
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