Futures tumble on fears over new coronavirus strain

(Reuters) -U.S. stock index futures tumbled on Monday as fears over a new strain of the coronavirus that has shut down much of Britain overshadowed a $900 billion stimulus package deal.

FILE PHOTO: A statue of George Washington stands as Federal Hall across Wall Street from the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar

The strain, which is said to be up to 70% more transmissible than the original, forced major European countries to shut their borders with the UK and sowed fears of further economic disruptions.

Travel stocks fell in premarket trading, with Delta Air Lines Inc, United Airlines Holdings Inc and American Airlines Group Inc slumping between 4.8% and 5.3%. Cruise operators Royal Caribbean Cruises, Carnival Corp and Norwegian Cruise Line Holdings fell between 8.4% and 9.5%.

The CBOE Volatility Index, also known as Wall Street’s “fear gauge”, jumped 29.7 points to its highest level since early November.

At 6:22 a.m. ET, Dow e-minis were down 588 points, or 1.95%, S&P 500 e-minis were down 80.5 points, or 2.17%, and Nasdaq 100 e-minis were down 176.5 points, or 1.39%.

U.S. congressional leaders reached an agreement on Sunday on a $900 billion package to provide fresh aid to the virus-stricken economy, with the bill likely to be voted into effect later in the day. Optimism over the bill had seen Wall Street indexes reach record highs last week.

Bank of America Corp, Morgan Stanley, Citigroup Inc, Goldman Sachs JPMorgan Chase & Co rose between 1.3% and 2.9% after the U.S. Federal Reserve highlighted strong capital levels at the banks in the results of its second “stress test” for 2020.

Electric-car maker Tesla Inc, which has soared more than 730% so far this year, fell 5.7% ahead of its much anticipated debut into the benchmark S&P 500 index.

Lockheed Martin Corp fell 1.6% after it agreed to buy U.S. rocket engine manufacturer Aerojet Rocketdyne Holdings Inc for $4.4 billion. Shares of Aerojet Rocketdyne were up 27.3%.

Planemaker Boeing Co slipped 6.7% on a U.S. Senate report saying Boeing officials “inappropriately coached” test pilots during recertification efforts.

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