Investing.com – US stocks kicked off the week in the same way they ended the previous week, with a sharp dip fueled by fears of a return to the COVID-19 epidemic as winter approaches in the northern hemisphere, and worries that the valuation of a number of tech stocks companies may be much lower than the astronomical heights observed in the summer.
Reports of chronic non-compliance by banks with anti-money laundering regulations and the resignation of Nikola (NASDAQ: NKLA) chairman of the board of directors Trevor Milton in connection with allegations of fraud further spoiled the mood of investors who await the speech of the chairman of the Federal Reserve System Jerome Powell.
By 09:35 am ET (13:35 GMT), the Dow Jones Industrial Average was down 550 points, or 2.0%, to 27.107, while the S&P 500 (NYSE: SPY) fell 1.7% while the Nasdaq Composite Index fell 1.6%.
Nikola was the most visible underdog, dropping 21% to a four-month low following Milton's resignation. General Motors (NYSE: GM), which just two weeks ago invested $ 2 billion in an 11% stake in Nikola, fell 4.5%.
Illumina Inc (NASDAQ: ILMN) also lost more than 5% after the gene sequencing equipment maker said it would pay $ 7.1 billion in cash and stock for its Grail stake. Grail is developing a blood test to diagnose cancer, but has no revenue yet.
Oracle Corporation (NYSE: ORCL) shares rose 1.7% amid conflicting reports of progress on Tik Tok status in the United States, while Tesla Inc (NASDAQ: TSLA) rose 1.1% after an electronic a letter from CEO Elon Musk to employees, in which he says as usual towards the end of the quarter that the company can break records in supply and sales. Tesla will host an event on Tuesday to showcase advances in battery design.
United Airlines Holdings (NASDAQ: UAL) plummeted 8.0% and Delta Air Lines (NYSE: DAL) plunged 8.8%. Airline stocks are particularly at risk of another downturn because it may be harder for them to get the attention of legislators and secure a second round of bailouts.
Meanwhile, in Washington this weekend, everyone was shocked by the death of Supreme Court Justice Ruth Bader Ginsburg and its aftermath, setting the stage for yet another bitter debate over how and when to appoint new judges. This could derail the already difficult process of reaching a compromise agreement on the fourth round of economic assistance measures.
By Jeffrey Smith