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US STOCKS-Wall Street closes lower as virus spike hits travel stocks

Tue 20th April, 2021 9:27pm
* Kansas City Southern surges on bid from Canadian National
    * Boeing slides on CFO's shock retirement
    * CBOE volatility index hits three-week high

 (Adds post 4 p.m. close pricings)
    By Herbert Lash
    NEW YORK, April 20 (Reuters) - Stocks on Wall Street fell
for a second straight day on Tuesday as a global spike in
coronavirus cases hit travel-related shares and investors had
second thoughts about big U.S. banks' apparently stellar
earnings last week.
    Kansas City Southern  KSU.N  surged 15.2% on the prospect of
a bidding war after Canadian National  CNR.TO  offered about $30
billion for the U.S. railroad, some $5 billion more than an
earlier offer from Canadian Pacific  CP.TO .  urn:newsml:reuters.com:*:nL4N2MD2UA
    Boeing Co  BA.N  slid 4.1% on the unexpected departure of
its finance chief, the latest shock to hit the planemaker as it
fights to recover from the pandemic and 737 MAX crisis.
    Investors piled into defensive sectors considered relatively
safe during times of economic uncertainty, lifting real estate
 .SPLRCR , utilities  .SPLRCU , consumer staples  .SPLRCS  and
healthcare  .SPXHC  as financials and energy shares fell hard. 
    Shares of airline operators and cruiseliners including
JetBlue Airways  JBLU.O , American Airlines  AAL.O , Norwegian
Cruise Line  NCLH.N  and Carnival Corp  CCL.N , which were
hammered last year during lockdowns but have climbed recently on
the reopening hopes, fell more than 4%. 
    Some of the recent optimism about the leisure industry has
waned as the reopening might take a bit longer than initially
thought, said Michael James, managing director of equity trading
at Wedbush Securities in Los Angeles.
    "We're not out of the woods yet when it comes to the COVID
virus and getting to where global economies are reopening," he
said. "Some of that enthusiasm has diminished." 
    A leading epidemiologist at the World Health Organization 
said on Monday the latest rise in COVID-19 infections worldwide
reflected increases among all age groups.  urn:newsml:reuters.com:*:nZ8N2K800Q
    Wall Street scaled record highs last week as investors bet
on stocks such as industrials and miners that are seen as
benefiting from the economic rebound, while highly valued
technology stocks regained favor after a retreat in bond yields.
    The Dow Jones Industrial Average  .DJI  fell 0.75% to
33,821.3. The S&P 500  .SPX  shed 0.68% to 4,134.94 and the
Nasdaq Composite  .IXIC  dropped 0.92% to 13,786.27.
    It was the first back-to-back declines for the S&P since the
end of March.  
    Volume on U.S. exchanges was 10.21 billion shares, compared
with the 10.59 billion average for the full session over the
last 20 trading days. 
    The CBOE volatility index  .VIX , known as Wall Street's
fear gauge, climbed above 19 points for the first time since
March 31, before closing at 18.71.  
    JPMorgan Chase & Co  JPM.N , Bank of America Corp  BAC.N ,
Citigroup Inc  C.N  and Wells Fargo & Co  WFC.N  led financials
lower as analysts reassessed their earnings reports, said Dick
Bove, senior research analyst at Odeon Capital Group.
    Accounting changes on how to report loan reserves skewered
numbers when compared to a year ago, he said.   
    "People made the assumption this was a gangbusters quarter
for the banking industry when that's far from the truth," Bove
said, adding second-half profits are expected to be very strong.
    United Airlines Holdings Inc  UAL.OQ  was the largest
decliner, falling 8.5%, on the S&P 500 after reporting a
bigger-than-expected adjusted net loss to push the S&P 1500
airline index  .SPCOMAIR  down 4.6%.  urn:newsml:reuters.com:*:nL4N2MC410
    Shares of video-streaming service provider Netflix Inc
 NFLX.O , which thrived during last year's lockdowns, fell 0.9%
ahead of its results due after the closing bell.
    Netflix tumbled about 10% in after-hours trade following
news that the company added fewer-than-expected paid subscribers
in the first quarter, weighed down by a lighter content slate in
the first half of 2021 due to COVID-19 production delays.
    International Business Machines Corp  IBM.N  rose 3.8% after
recording the biggest increase in quarterly sales in more than
two years.  urn:newsml:reuters.com:*:nL4N2MC3XY
    Analysts expect first-quarter earnings from S&P 500 firms to
jump 31.5% from a year earlier, according to Refinitiv IBES
    Declining issues outnumbered advancing ones on the NYSE by a
2.71-to-1 ratio; on Nasdaq, a 3.18-to-1 ratio favored decliners.
    The S&P 500 posted 61 new 52-week highs and no new lows; the
Nasdaq Composite recorded 47 new highs and 116 new lows.  

 (Reporting by Shivani Kumaresan and Medha Singh in Bengaluru;
Editing by Sriraj Kalluvila, Anil D'Silva and Arun Koyyur and
Richard Chang)
 ((Shivani.Kumaresan@thomsonreuters.com; +1 646 223 8780;))
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