* Kansas City Southern (NYSE: KSU ) surges on bid from Canadian National
* Nike (NYSE: NKE ) falls as Citi downgrades stock
* CBOE volatility index hits three-week high (Adds afternoon prices)
By Herbert Lash and Medha Singh
April 20 (Reuters) - Wall Street's main indexes fell for a second straight day on Tuesday as a global spike in coronavirus cases hit travel stocks and investors had second thoughts about big U.S. banks' apparently stellar earnings last week.
Kansas City Southern (NYSE: SO ) KSU.N surged 16.1% on the prospect of a bidding war after Canadian National CNR.TO offered about $30 billion for the U.S. railroad, some $5 billion more than an earlier offer from Canadian Pacific CP.TO . Co BA.N slid 4.6% on the unexpected departure of its finance chief, the latest shock to hit the planemaker as it fights to recover from the pandemic and 737 MAX crisis. piled into defensive sectors considered relatively safe during times of economic uncertainty: real estate .SPLRCR , utilities .SPLRCU , consumer staples .SPLRCS and healthcare .SPXHC .
Shares of airline operators and cruiseliners including JetBlue Airways JBLU.O , American Airlines AAL.O , Norwegian Cruise Line NCLH.N and Carnival Corp (LON: CCL ) CCL.N , which were hammered last year as widespread lockdowns led to a halt in global travel, fell between 5% and 9%.
Some of the recent optimism about the leisure industry has waned as the reopening might take a bit longer than initially thought, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
"We're not out of the woods yet when it comes to the COVID virus and getting to where global economies are reopening," he said. "Some of that enthusiasm has diminished."
Wall Street scaled record highs last week as investors bet on stocks such as industrials and miners that are seen as benefiting from the economic rebound, while highly valued technology stocks regained favor after a retreat in bond yields.
The CBOE volatility index .VIX , known as Wall Street's fear gauge, rose above 19 points for the first time since March 31.
JPMorgan Chase & Co (NYSE: JPM ) JPM.N , Bank of America Corp (NYSE: BAC ) BAC.N , Citigroup Inc (NYSE: C ) C.N and Wells Fargo (NYSE: WFC ) & Co WFC.N led financials lower as analysts reassessed their first-quarter earnings reports, said Dick Bove, senior research analyst at Odeon Capital Group.
Accounting changes on how to report loan reserves skewered numbers when compared to a year ago, he said.
"People made the assumption this was a gangbusters quarter for the banking industry when that's far from the truth," Bove said, adding second-half profits are expected to be very strong.
United Airlines Holdings Inc UAL.OQ tumbled 9.6%, the largest decliner on the S&P 500, after reporting a bigger-than-expected adjusted net loss. Its shares dragged the S&P 1500 airline index .SPCOMAIR down 5.2%. of video-streaming service provider Netflix Inc NFLX.O , which thrived during last year's lockdowns, fell about 0.5% ahead of its results due after the closing bell.
International Business Machines (NYSE: IBM ) Corp IBM .N rose 3.8% after recording the biggest rise in quarterly sales in more than two years. expect first-quarter earnings from S&P 500 firms to jump 31.5% from a year earlier, according to Refinitiv IBES data.
Declining issues outnumbered advancing ones on the NYSE by a 3.32-to-1 ratio; on Nasdaq , a 3.84-to-1 ratio favored decliners.
The S&P 500 posted 59 new 52-week highs and no new lows; the Nasdaq Composite recorded 43 new highs and 106 new lows.
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