US STOCKS-Wall St tumbles to 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 2.92%, S&P 500 2.21%, Nasdaq 1.29%

(Updates to early afternoon, adds comments)
By Devik Jain and Shreyashi Sanyal
Sept 21 (Reuters) - Wall Street's main indexes tumbled to
their lowest in nearly seven weeks on Monday, with the Dow
shedding as much as 900 points, as worries about fresh
coronavirus-driven lockdowns spilled over from Europe.
The CBOE Market Volatility index .VIX , a measure of
investor anxiety, shot up to its highest level in nearly two
weeks amid uncertainty caused by the death of U.S. Supreme Court
Justice Ruth Bader Ginsburg.
Analysts said the chances of another fiscal stimulus package
from Congress to help lift the domestic economy from a recession
had become grim following her death.
"It just kind of crowds out the agenda, the idea that we are
going to get a fiscal stimulus package before the election,"
said Ed Campbell, portfolio manager and managing director at QMA
in Newark, New Jersey.
"There is also just general election related jitters ... and
possibly that we have a contested or delayed outcome."
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. Healthcare providers came under pressure on uncertainty over
the Obamacare case, with shares of Universal Health Services
UHS.N falling more than 11%.
Ginsburg's death can 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.
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 , energy
.SPNY and financials .SPSY as opposed to technology stocks
.SPLRCT .
Airline, hotel and cruise companies tracked declines in
their European peers as the UK signalled the possibility of a
second national lockdown. Europe's travel and leisure index
.SXTP marked its worst two-day drop since April. .EU
At 12:54 p.m. ET the Dow Jones Industrial Average .DJI was
down 806.55 points, or 2.92%, at 26,850.87, the S&P 500 .SPX
was down 73.48 points, or 2.21%, at 3,245.99 and the Nasdaq
Composite .IXIC was down 139.47 points, or 1.29%, at
10,653.81.
JPMorgan Chase & Co JPM.N and Bank of New York Mellon Corp
BK.N fell 4.4% and 5.6%, 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 4.5%.
Nikola Corp NKLA.O plunged 18.2% 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 said it would take an 11%
stake in the electric truck maker, slipped 5.7%.
Declining issues outnumbered advancers for a 9.17-to-1 ratio
on the NYSE and for a 5.66-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and one new low,
while the Nasdaq recorded 15 new highs and 47 new lows.