Economic indicators fall, U.S. stocks drop as spread of delta variant ignites worries

U.S. stocks dropped on Monday as oil and other sectors sensitive to economic development fell amid concern about the Covid-19 pandemic.

The Dow Jones Industrial Average fell 0.3 %, while the S&P 500 fell less than 0.1 %. The Nasdaq Composite, which is heavily weighted toward technology, gained 0.1 % around 4:00 PM ET.

Brent crude futures fell 1.9 % as China's new steps to battle the Delta variant of Covid-19 rekindled fears that the virus might harm energy consumption. Oil prices were further dragged down by data released over the weekend showing that China bought less oil per day in July than in June, according to experts. China is the world's top oil importer.

Eight of the S&P's 11 major sectors dropped, while consumer staples and financials led advances.

Investors were looking for new triggers to propel the market higher after the S&P 500 and Dow Jones ended last week at record highs due to good job data.

Following a great earnings season, U.S. equities have surged to new highs in the last two weeks, with numerous big businesses reporting profits that are above expectations, reinforcing confidence in a post-COVID economic rebound this year.

According to Refinitiv IBES data, economists anticipated a 93.1 % profit increase for S&P 500 firms in the second quarter. So far, 87.4 % of the 443 companies in the index that have reported profits have exceeded analyst forecasts, the greatest rate on record, Reuters reported.

Sanderson Farms Inc rose 7.4 % after agreeing to be acquired for $4.53 billion by commodities trader Cargill Inc and investment company Continental Grain Co at a time when meat prices are skyrocketing owing to high demand.

Tyson Foods Inc rose 8.6 % after the meat processing firm upped its sales projection for fiscal 2021.

Berkshire Hathaway Class A shares gained 0.4 % after Warren Buffett's conglomerate announced stronger net earnings over the weekend, owing to growth at its railroad, utilities, and energy businesses.

Bitcoin is up roughly 6.02 % from where it was at 5 p.m. ET on Friday, it is trading at $46,400 reaching its highest level since May.

As investors continued to follow corporate earnings, AMC Entertainment Holdings Inc, a popular meme stock, is slated to announce results after the markets close, while Walt Disney Co and Airbnb Inc are expected to report later this week.

Overseas, the Stoxx Europe 600 index rose 0.21 %, Nikkei 225 climbed 0.3 %. The Hang Seng Index increased 0.4 % and Shanghai Composite Index soared 1.05 %.

With inputs from WSJ