US STOCKS-Wall Street drops on fears over new coronavirus strain

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* Travel stocks drop on disruption fears
* Big banks jump after Fed's stress test results
* U.S. Congress set to vote on $900 bln relief bill
* Tesla slips from record high in its S&P 500 debut
* Indexes down: Dow 1.29%, S&P 1.86%, Nasdaq 1.76%

(Updates to market open)
By Ambar Warrick and Devik Jain
Dec 21 (Reuters) - Wall Street's main indexes fell on
Monday, as a more-virulent strain of the coronavirus in Britain
sparked fears of fresh disruptions and weighed on investors'
expectations of a vaccine-led economic rebound.
The strain, which is said to be up to 70% more transmissible
than the original, forced many countries to shut their borders
with the United Kingdom. All the 11 major S&P sub-indexes fell, with energy shares
.SPNY leading declines as crude prices slipped on concerns of
waning fuel demand. Chevron Corp CVX.N , Exxon Mobil Corp
XOM.N and Occidental Petroleum Corp OXY.N dropped between 2%
and 5% in early trading. O/R
Travel-related stocks, among the hardest hit by the
pandemic-fueled restrictions, fell. The S&P 1500 airlines index
.SPCOMAIR slid 3%, even as carriers were poised to receive $15
billion in new payroll assistance as part of a new coronavirus
stimulus package.
Cruise operators Royal Caribbean Cruises Ltd RCL.N ,
Carnival Corp CCL.N and Norwegian Cruise Line Holdings Ltd
NCLH.N shed between 3.8% and 4.5%.
"The precautions required to assess the potential harm of
the new COVID-19 strain will undoubtedly introduce additional
risk to markets, which expected a smooth return to normal life
following the vaccine's rollout," said James McDonald, CEO and
chief investment officer of Hercules Investments in Los Angeles.
The CBOE Volatility Index .VIX , also known as Wall
Street's "fear gauge", jumped to its highest level since early
November and was last at 28.38 points.
At 10:20 a.m. ET, the Dow Jones Industrial Average .DJI
was down 389.55 points, or 1.29%, at 29,789.50, the S&P 500
.SPX was down 69.13 points, or 1.86%, at 3,640.28, and the
Nasdaq Composite .IXIC was down 224.62 points, or 1.76%, at
12,531.02.
U.S. congressional leaders were poised to vote on a $900
billion relief package to provide fresh aid to the
virus-stricken economy. Optimism over the bill had helped Wall
Street indexes hit record highs last week. The S&P financials sector .SPSY posted the smallest
decline, helped by gains in Goldman Sachs GS.N , Citigroup Inc
C.N , Morgan Stanley MS.N , Bank of America Corp BAC.N and
JPMorgan Chase & Co JPM.N .
Shares rose between 0.4% and 5.3% after the Federal Reserve
permitted major lenders to pay out dividends and buy back stock
on a limited basis following a stress test. Nike Inc NKE.N jumped 5.4% following multiple price target
raises after the athletic apparel maker raised its full-year
revenue forecast. Electric-car maker Tesla Inc TSLA.O , which has soared more
than 690% so far this year, slipped 5.3% in its debut on the
benchmark S&P 500 index. Lockheed Martin Corp LMT.N fell 2.2% after it agreed to
buy U.S. rocket engine manufacturer Aerojet Rocketdyne Holdings
Inc AJRD.N for $4.4 billion. Shares of Aerojet climbed
22%.
Planemaker Boeing Co BA.N slipped 2.2% on a U.S. Senate
report that company officials "inappropriately coached" test
pilots during recertification efforts. Declining issues outnumbered advancers for a 4.97-to-1 ratio
on the NYSE, and for a 2.98-to-1 ratio on the Nasdaq.
The S&P index recorded five new 52-week highs and no new
low, while the Nasdaq recorded 78 new highs and 14 new lows.