US STOCKS-Wall St near seven-week low on virus fears, stimulus fog

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* Shares of airline, cruise, hotel and casino companies
tumble
* Big lenders fall on reports banks moved illicit funds
* Nikola crashes as founder resigns; GM shares fall
* Indexes down: Dow 3.23%, S&P 500 2.50%, Nasdaq 1.96%

(Adds comments, updates prices throughout)
By Devik Jain and Shreyashi Sanyal
Sept 21 (Reuters) - Wall Street's main indexes hit their
lowest in nearly seven weeks on Monday as concerns about fresh
coronavirus-driven lockdowns and a stalemate in Congress over
more fiscal stimulus raised fears about another hit to the
domestic economy.
All the major S&P indexes were down, with energy .SPNY
leading declines as oil prices slid on the possible return of
Libyan production and rising coronavirus cases. O/R
The CBOE Market Volatility index .VIX , a measure of
investor anxiety, shot up to its highest level in nearly two
weeks.
Wall Street has tumbled in the past three weeks as investors
dumped heavyweight technology-related stocks following a
stunning rally that returned the S&P 500 and the Nasdaq to
record highs.
Another round of business restrictions will threaten a
nascent recovery in the wider economy and add further pressure
on equity markets, analysts said. The first round of lockdowns
in March had led the S&P 500 .SPX to suffer its worst monthly
decline since the global financial crisis. US/
In contrast to last week's trend, declines were led by
value-oriented sectors such as industrials .SPLRCI and
financials .SPSY as opposed to technology stocks .SPLRCT .
Analysts said the passing of U.S. Supreme Court Justice Ruth
Bader Ginsburg also decreases the chances of another fiscal
stimulus package to help lift the domestic economy from a deep
recession.
Tom Martin, senior portfolio manager at GLOBALT Investments
in Atlanta, said finding a replacement for Justice Ginsburg is
going to take up the time and energy of Congress.
"So there's going to be very little bandwidth for putting in
a new fiscal bill with this new development."
Congress has for weeks remained deadlocked over the size and
shape of a fifth coronavirus-response bill, on top of the
approximately $3 trillion already enacted into law. The passing of Justice Ginsburg could also lead to a tie
vote when the Supreme Court hears the challenge to the
constitutionality of the Affordable Care Act (ACA) in November,
Brokerage Mizuho said.
Healthcare provider Universal Health Services UHS.N , which
is expected to have the greatest exposure to the reform, fell
11.9%.
At 11:39 a.m. ET the Dow Jones Industrial Average .DJI was
down 892.05 points, or 3.23%, at 26,765.37, the S&P 500 .SPX
was down 83.06 points, or 2.50%, at 3,236.41 and the Nasdaq
Composite .IXIC was down 211.02 points, or 1.96%, at
10,582.27.
JPMorgan Chase & Co JPM.N and Bank of New York Mellon Corp
BK.N fell 4.4% and 4.9%, respectively, on reports that several
global banks moved large sums of allegedly illicit funds over
nearly two decades despite red flags about the origins of the
money. The S&P banking subindex .SPXBK lost 4.3%.
Nikola Corp NKLA.O crashed 20.3% after its founder Trevor
Milton stepped down as executive chairman following a public
squabble with a short-seller over allegations of nepotism and
fraud. General Motors Co GM.N , which took an 11% stake in Nikola
for about $2 billion earlier this month, slipped 6.7%.
Airline, hotel and cruise companies tracked declines in
their European peers as the UK signalled the possibility of a
second national lockdown. .EU
Declining issues outnumbered advancers for a 10.22-to-1
ratio on the NYSE and for a 6.86-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and one new low,
while the Nasdaq recorded 11 new highs and 43 new lows.