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Stocks Tumble On Big Banks' Role In Money Laundering Report, Fears Of Relief Delay

U.S. stock indexes fell sharply Monday amid renewed economic tensions with China.
U.S. stock indexes fell sharply Monday amid renewed economic tensions with China.

Updated at 4:14 p.m. ET

The Dow Jones Industrial Average dropped 509 points Monday following a report that large global banks were involved in transactions flagged as possible money laundering.

And hopes for another relief measure from Congress flagged as lawmakers focused on the fight over a Supreme Court nomination following the death of Justice Ruth Bader Ginsburg.

The Dow fell 1.8%, to 27,147, and the broader S&P 500 index slid 1.2%. The Nasdaq composite index closed down 0.1%. All three indexes were down more sharply earlier Monday.

Bank stocks fell after a news report that JPMorgan Chase, Deutsche Bank and other giant banks defied money laundering crackdowns. JPMorgan Chase fell more than 3%, Citigroup was down 2.2% and HSBC was down nearly 6%.

A surge in COVID-19 cases in the United Kingdom raised fears of another lockdown there. Lockdowns have ripple effects that hurt several industries, including travel. Airlines stocks plummeted Monday, with United Airlines down nearly 9% and American Airlines down 7.4%.

Stocks have had a rough September. The Dow has fallen nearly 5% so far this month.

Another factor weighed on the market Monday. Over the weekend, China announced rules for a new regulatory body that could blacklist foreign companies that unfairly treat Chinese companies or pose a threat to Chinese national security, NPR's Emily Feng reported.

China has not yet said which companies would be labeled " unreliable entities," but Chinese state media have suggested that U.S. tech companies, including Apple, Qualcomm and Cisco, would be considered. U.S. tech stocks, which led the market to new records, have been sliding in recent weeks.

The latest tensions with China come as the Trump administration has threatened to bar the Chinese-owned TikTokand WeChatapps in the United States.

The U.S. economic slowdown amid the coronavirus pandemic also continues to worry investors. Retail sales grew more slowly in August after an extra $600 per week in federal unemployment benefits expired.

The Federal Reserve has cut interest rates to historic lows and said it expects to keep them down through at least 2023, but Congress has been deadlocked about providing additional pandemic economic assistance. The debate over whether President Trump should be allowed to name a successor to Ginsburgcould dampen hopes for a relief deal.

Copyright 2020 NPR. To see more, visit https://www.npr.org.