Dow futures fall more than 350 points as the delta variant spread continues

Stock index futures pointed to a lower start Monday, with concerns about the global spread of the delta strain of the coronavirus putting COVID-19 in much of the blame as investors prepared for another big week of corporate earnings.

What do large indexes do?
  • Futures on the Dow Jones Industrial Average YM00,
    -1.35%
    fell 366 points, or 1.1%, to 34,198.

  • S&P 500 futures ES00,
    -1.10%
    fell by 36.60 points, or 0.9%, to 4,282.

  • Nasdaq-100 futures NQ00,
    -0.87%
    fell 83.50 points, or 0.6%, to 14,587.

Stocks ended lower on Friday, with all three major indices for the week, ending a string of three consecutive weekly victories. The Dow DJIA,
-0.86%
saw a weekly decline of 0.5%, while the S&P 500 SPX,
-0.75%
moved 1% and the Nasdaq Composite COMP,
-0.80%
loss 1.9%.

What drives the market?

Pressure on global stock markets on Monday was largely attributed to the continued rise in the number of COVID-19 cases worldwide.

“Markets appear to be grappling with fears that the virus will not go away despite widespread vaccinations in major economies,” Marios Hadjikyriacos, senior investment analyst at XM, said in a note.

“New and more resilient mutations could be a perpetual phenomenon that wreaks havoc, especially in developing countries, and ultimately hinders recovery,” he said. “The overwhelming firepower of governments and central banks was enough to fight the pandemic, but not enough to destroy it.”

Concerns about the virus are especially problematic for sectors and industries, such as travel, which were expected to benefit most from the reopening of the global economy.

Meanwhile, treasuries continued to rise and yields continued to be under pressure, moving in the opposite direction to prices. The return on the 10-year Treasury TMUBMUSD10Y,
1.229%
fell more than 5 basis points near 1.25%.

Read: Is the bond market wrong about inflation?

Earnings season is picking up steam this week, with nearly a third of the 30 Dow Jones Industrial Average components and more than 80 S&P 500 companies expected to report in the coming week. According to John Butters, senior earnings analyst at FactSet, performance has been strong so far this quarter, with 85% of S&P 500 companies reporting exceeding expectations and none lowering expectations.

Highlights in earnings for the coming week include Netflix Inc. NFLX,
-2.33%
on Tuesday and Intel Corp. INTC,
-1.51%
on Thursday.

Income example: What does an adult streaming service look like? Netflix is ​​going to show it to us

A busy week of housing data kicks off with the July reading of the National Association of Home Builders Index at 10 a.m. Eastern.

Which companies take center stage?
  • Shares of Five9 Inc.
    FIVN,
    +0.58%
    rose more than 8% in premarket trading after announcing a $14.7 billion all-stock buyout deal against Zoom Video Communications Inc. ZM, on weekends. Zoom shares fell 2%.

  • Bill Ackman’s Pershing Square Tontine Holdings
    PSTH,
    -1.81%
    said Monday it was abandoning a deal to buy a 10% stake in Universal Music Group, citing concerns from regulators and shareholders. PSTH shares rose slightly in premarket trading on Monday.

  • Cal Maine Foods Inc.
    CALM,
    -0.44%
    Monday reported a surprising fourth-quarter fiscal loss and earnings that fell below expectations, with egg sales falling as the lifting of COVID-19-related restrictions led to fewer meals being prepared at home. The stock lost 0.2%.

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