US STOCKS-Wall Street plummets as rising Delta variant cases revive shutdown fears

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* Dow on course for worst day since October

* Travel/leisure shares hit hard

* Falling Treasury yields hit bank stocks

* Indexes slide: Dow 2.58%, S&P 2.04%, Nasdaq 1.37% (Updates to late afternoon, changes dateline, byline)

NEW YORK, July 19 (Reuters) – Wall Street plunged in a broad sell-off on Monday as mounting infections of the COVID-19 Delta variant revived fears of renewed shutdowns and a protracted economic recovery, sending investors fleeing for safety.

All three major U.S. stock indexes followed their European counterparts sharply lower, with the S&P and the Nasdaq on course for their worst daily percentage drop since mid-May.

The blue-chip Dow was on track for its worst day in nearly nine months.

The risk-off sentiment also sent U.S. 10-year Treasury yields sliding. Rate sensitive banks dropped 3.6%.

“Despite the COVID or Delta variant fears, sell-offs can happen at any time and people like to slap a reason on it,” said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York. “We think the U.S. economic recovery is on track and will continue.”

The highly contagious COVID-19 Delta variant, now the dominant strain across the globe, has caused a surge in new infections and deaths, nearly exclusively among unvaccinated people.

For an interactive graphic on worldwide vaccine deployment and availability, click here here.

“Hopefully, (the infection surge) gives people a wake-up call, maybe they should get vaccinated,” Pursche added. “It’s clear that the vaccine works, it’s overwhelmingly safe and people should get vaccinated.”

Travel and leisure stocks plunged, with the S&P 1500 Airline index shedding 4.0% and the S&P 1500 Hotel and Restaurant index off 3.1%.

The CBOE Volatility index, a gauge of investor anxiety, was last up 6.0 points at 24.49, having touched its highest level in two months.

The Dow Jones Industrial Average fell 896.24 points, or 2.58%, to 33,791.61, the S&P 500 lost 88.43 points, or 2.04%, to 4,238.73 and the Nasdaq Composite dropped 198.35 points, or 1.37%, to 14,228.89.

All 11 major sectors in the S&P 500 were deep in negative territory, with energy stocks suffering the largest percentage drop.

Second-quarter reporting season is under way, with 41 of the companies in the S&P 500 having reported. Of those, 90% have beaten consensus estimates, according to Refinitiv.

Among high-profile names, Netflix, Twitter , Johnson & Johnson, United Airlines and Intel, along with a host of industrials from Honeywell to Harley-Davidson are due to post results this week.

International Business Machines Corp is expected to report after the closing bell.

Analysts now see year-on-year S&P 500 earnings growth of 72% for the April to June period, substantially higher than the 54% annual growth forecast at the beginning of the quarter, per Refinitiv.

Zoom Video Communications Inc announced a $14.7 billion all-stock deal to buy cloud-based call center operator Five9 Inc. The teleconferencing services provider’s shares dropped 3.3%, while Five9’s jumped 5.4%.

Tech tensions between the United States and China grew more heated with the United States and its allies accusing Beijing of a global hacking campaign while shares of Chinese tech firms listed on foreign exchanges dropped amid fears of regulatory crackdowns.

“This is politics at work,” Pursche said. “With regards to China, there’s been an ongoing crackdown and heavy hand of politics and we’re starting to see a trend that’s something we need to pay attention to.”

U.S.-listed shares of China-based ride-hailing app Didi Global slid 6.5%.

Declining issues outnumbered advancing ones on the NYSE by a 6.49-to-1 ratio; on Nasdaq, a 2.88-to-1 ratio favored decliners.

The S&P 500 posted 12 new 52-week highs and no new lows; the Nasdaq Composite recorded 18 new highs and 245 new lows.

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