Stocks retreat on Delta variant gloom

NEW YORK (AFP/APP): Global stock markets were broadly lower Tuesday as investors fretted that the resurgent Delta coronavirus variant may put the brakes on the global economic recovery.
New Zealand announced a snap three-day national lockdown, which follows a curfew imposed Monday in Australia’s second-largest city of Melbourne over a Delta variant outbreak.
Those moves added to concern about lockdowns and travel restrictions in China, the world’s second-largest economy.
Wall Street’s streak of five straight records for the Dow and S&P 500 indices ended with a thud after a lackluster US retail sales report that exacerbated worries about the latest Covid-19 wave.
Earlier, Asian and European markets fell for the second straight day.
London’s FTSE 100 stocks index was a rare climber after official data revealed a dip in UK unemployment during the second quarter as the economy began to reopen from lockdown. Separate figures confirmed that the eurozone economy rebounded two percent in the April-June period.
On the corporate front, shares in BHP surged more than seven percent in London after the giant miner announced a multi-billion-dollar deal to sell its liquid fossil fuels business as it seeks to transition to cleaner energy.
BHP also logged its highest annual profit in almost a decade on runaway copper and iron ore prices, and the stock closed the day with a three percent gain.
Semiconductor ripple effects
Back in the United States, investors digested government data showing a dismal 1.1 percent drop in US retail sales in July, mostly the fault of a steep decline in auto sales.
Car makers have been hammered by a shortage of computer chips amid a boom in demand for electronics as more people stayed home during coronavirus restrictions, prompting automakers to slow or even stop production at some factories.
When autos are excluded, the retail sales drop is only 0.4 percent. However JJ Kinahan at TD Ameritrade said the report, together with data released Friday showing the University of Michigan’s consumer sentiment index falling in August to its lowest level since 2011, could bode ill for the recovery.
“When you match that up with a bunch of negative data reads lately including last Friday’s sentiment print, it paints a picture of consumers possibly being less willing to spend,” he said.
“Analysts immediately blamed the Delta variant.” analyst Patrick O’Hare said investors were also primed to sell after the run of record closes.
Investors “found enough of an excuse to dial things back,” O’Hare said in an interview.

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