Wall Street dragged down by falling airline stocks

US benchmarks were dragged down by poor performances among airline stocks this morning as surging Covid cases dampens the outlook for the travel sector.

The blue-chip S&P 500 dipped 0.08 per cent to 4,432 points, while the Dow Jones slid 0.24 per cent to 35,123 points.

The tech-heavy Nasdaq fared better, jumping 0.19 per cent to 14,864 points.

Concerns about rising Covid cases in Asia driven by the Delta variant are growing among investors, prompting many of them to pour out of airline stocks.

American and United Airlines’ share prices tumbled 2.48 per cent and 2.69 per cent respectively in morning trading.

Yields on ten-year Treasuries edged down slightly to 1.32 per cent.

FTSE 100 rebounds to reverse morning losses

The FTSE 100 repaired sharp losses registered during the morning session to fininsh the opening day of the week up slighlty.

The capital’s premier index gained 0.13 per cent to reach 7,132 points on Monday.

The blue-chip index was dragged down by energy stocks as plummeting oil prices prompted investors to dump their holdings in the sector.

Sharp falls in oil prices were primarily driven by the publication of a landmark report highlighting the potential impact of climate change in the coming decades and concerns that surging Covid case rates in China could hit demand for oil.

The domestically-focused FTSE 250 edged down 0.01 per cent to 23,453 points, while AIM shares lost 0.04 per cent to reach 1,261 points.

Michael Hewson, chief market analyst at CMC Markets UK, said: “Having set records on an almost daily basis last week, it’s been a lacklustre start for European markets today with little in the way of direction, with weakness in commodity prices being offset by strength in the likes of defensives, with utilities and healthcare outperforming, and helping to prop up the FTSE100.”

Winners and losers

Despite reporting a lift in profits this morning, the FTSE 100’s biggest faller was Hargreaves Lansdown, which shed 11.34 per cent to close at 1,454.50p.

Investors focused on the lower dividend and chief executive Chris Hill’s comments that the company does not expect the “exceptional” volume of trading to remain at such high levels. 

British Airways parent company IAG ranked as the second worst performer on the blue-chip index, dipping 3.3 per cent to close at 167.72p.

Aerospace engineer Rolls Royce was the third biggest faller, dipping 2.97 per cent to hit 109.08p.

Among the biggest risers, energy company SSE led the way after investors were boosted by reports activist investor Elliot Management has built up or is building up a stake in the company. Its shares gained 5.01 per cent to end the day at 1,623.50p.

The Scottish Mortgage Investment Trust came second, adding 2.69 per cent to rise to 1,375p, while bookmaker Flutter Entertainment placed third, up 1.73 per cent to 12,940p.

Around the world

Asian shares all entered positive territory in overnight trading, shaking off early losses after investors were spooked by a sharp decline in gold prices.

China’s CSI 300 rose 1.3 per cent to 4,985 points, while Japan’s Nikkei added 0.33 per cent to reach 27,820 points.

Hong Kong’s Hang Seng followed suit, up 0.4 per cent to 26,283 points.

Gains in London were extended into Europe – the Stoxx 600 was up 0.21 per cent to 470 points today.