Stocks fall on fears over Delta variant's spread

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Stocks fall on fears over Delta variant's spread

Stocks turned lower on Tuesday, with investors’ growth concerns and worries over the Delta variant's spread at least temporarily outweighing optimism over a batch of better-than - expected quarterly earnings results.

The S&P 500 plunged, giving back gains to the black market after opening in green. The Dow fell by about 100 points, or 0.3%, to pull back further from Monday's intraday high. Both Nasdaq and the CME indices declined.

Under Armour's stock rose after the athletic-wear maker boosted full-year sales estimates and topped its second-quarter earnings perspective. Simon Property Group shares also advanced after the company posted second-quarter results that handily exceeded estimates, increased its guidance and raised its dividend, with the mall real estate operator seeing occupancy rates and foot traffic improving alongside the reopening of the economy. Shares of video game-maker Take-Two Interactive however fell after the company's forecast for the current quarter missed estimates, overshadowing an otherwise better than expected print on profit and sales for its latest quarter.

In the recent quarter, the three major stocks have drifted downward as investors await more catalysts from corporate earnings results, economic data and policymakers.

Right now in Yahoo Finance we are going through a couple of transitions at the same time, George Mateyo, Chief Investment Officer at Key Private Bank, told Yahoo Finance. The first one is of course this deceleration in growth. We have seen this massive acceleration and growth since the pandemic.

Secondly, we have to fight with the Fed and as well with their transition, both on the leadership side and also with respect to policy, he added. And then we've got the Delta variant as well to consider, in terms of possibly transitioning into a new wave of cases in COVID - 19 situation.

In terms of the economy's growth outlook, Friday's July jobs report from the Labor Department will help provide a better sense of how much ground the labor market has recovered this summer, and whether the economy is close to the threshold for recovery to prompt a pivot to the Federal Reserve's ultra-supportive monetary policy. The companies including Avis Budget Group and Lyft Match Group reported quarterly results on Tuesday.

Despite Monday's drift, stocks are still holding close to record levels, supported by the combination of overall strong second-quarter earnings results, an ongoing economic recovery and still-accommodative Federal Reserve. However, some strategists are cautioning investors to remain vigilant on the valuation of stocks, given the relatively long stretch of time that has seen volatility in the markets since the last pullback. Stocks have been trading more than 180 trading days without a correction of 5% in one of the 15 longest stretches for the American equity market without such a pullback, according to recent research by Goldman Sachs.

There was almost a level of perfection offered into the market coming in summer and reopening that was really strong as well, said Ross Mayfield, Baird's investment strategy analyst, Yahoo Finance. I do think there are a lot of things working against the market also from a technical and fundamental perspective. And I wouldn't be surprised if some volatility and maybe a bit of a correction here in the near-term before resuming what should still be a really strong structural bull market.

ET: Stocks open higher after strong earnings from series of rising economics.

Here's how markets were trading shortly after the opening bell:

ET: Tencent shares slid after Chinese state news agency assail video game maker after China drop sales.

Shares of Chinese technology giant Tencent listed in Hong Kong fell 6% on Tuesday after a press outlet with ties to the Chinese government called the company and assailed online games of spiritual opium.

The Economic Information Daily press outlet has deleted one of Tencent's video games in the article, which called out subsequently. Tencent said however, that its videogame organization would work to stem a minor's time spent on its video games after the article.

The article comes amid a regulatory crackdown on the nation's biggest technology companies in China, with major scrutiny hitting names from Didi Global to Baidu and Chinese regulator Regulators. American depository receipts of both companies decreased following the article in early trading Tuesday morning.

Stock futures hold onto overnight gains as more earnings top estimates (STOX) increase.