Wall Street spooked by spreading Delta variant

A rocky day for stocks on Thursday as bond yields fell to lows not seen since February.

The yield on the 10-year note dipped for the eighth straight session – down below below 1.3 percent, in a sign investors are expecting slower economic growth.

As for the stock market: The Dow dropped 259 points. The S&P 500 fell 37. The Nasdaq lost 105.

Wall Street has turned cautious on the global economic outlook as the rapid spread of the Delta variant opens up a new phase in the health crisis, says National Securities Chief Market Strategist Art Hogan.

"We're concerned that some of the shutdowns that we're seeing, whether it's in Japan with the Olympics not allowing spectators or some of the Delta variant exploding in parts of the eurozone and India. So I think the muscle memory of what happens when we get a flare up to economic activity is starting to get people saying: 'Hey, at all time highs, why don't we pull back a little bit?"

That's not the only worry to resurface on Thursday. New applications for unemployment benefits surprisingly rose last week. First-time claims rose to 373,000 and the number for the previous week was upwardly revised. Even though a number of mostly Republican-led states have cut unemployment assistance, the number of Americans on some sort of government jobless aid remains quite high at 14.2 million at the end of June.

In company news: Morgan Stanley revealed that personal data for some of its corporate clients were stolen in January as part of a data hack, including names, social security numbers, and birthdays. The Wall Street firm said hackers were able to exploit a vulnerability in the system of a third-party vendor. Shares of Morgan Stanley were caught up in the broader market sell-off.