US STOCKS-Dow set to drop 500 points on virus fears, stimulus uncertainty

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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
* Futures tumble: Dow 2.04%, S&P 1.70%, Nasdaq 1.45%

(Adds comments, updates prices throughout)
By Devik Jain and Shreyashi Sanyal
Sept 21 (Reuters) - The Dow was set to drop 500 points at
the open on Monday as concerns about fresh coronavirus-driven
lockdowns and the inability of Congress to agree on more fiscal
stimulus raised fears about another hit to the domestic economy.
Shares of airline, hotel and cruise companies led declines
in premarket trading, tracking their European peers as the UK
signalled the possibility of a second national lockdown. .EU
Another round of business restrictions would threaten a
nascent recovery in the wider economy, analysts said, and could
spark a flight from equities. The first round of lockdowns in
March had led the benchmark S&P 500 .SPX to suffer its worst
monthly decline since the global financial crisis. US/
The index has since rebounded, thanks to historic global
stimulus, but is on track to halt a five-month winning streak as
investors dump heavyweight technology-related stocks.
"We've been in a momentum type trading market now for
weeks," said Rick Meckler, a partner at Cherry Lane Investments,
a family investment office in New Vernon, New Jersey.
"When the market ran up, its biggest reason was people
wanted to get in before it was even higher. And now we're seeing
the reverse process and people are becoming nervous that the
almost extraordinary gains for this year will all be given
back."
Thomas Mantione, managing director at UBS Private Wealth
Management in Stamford, Connecticut, 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.
"You've now put yet another negotiating factor into that
fiscal stimulus policy response, which makes it even less likely
to pass before the November election," Mantione said.
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 CBOE Market Volatility index .VIX , a measure of
investor anxiety, shot up to its highest level in nearly two
weeks.
At 9:04 a.m. ET, Dow e-minis 1YMcv1 were down 563 points,
or 2.04%, S&P 500 e-minis EScv1 were down 56.25 points, or
1.7%, and Nasdaq 100 e-minis NQcv1 were down 158.25 points, or
1.45%.
Shares in JPMorgan Chase & Co JPM.N and Bank of New York
Mellon Corp BK.N fell 3.7% and 3.2%, respectively, after
BuzzFeed and other media reported they and other banks moved
large sums of allegedly illicit funds over nearly two decades
despite red flags about the origins of the money. Nikola Corp NKLA.O crashed 26.8% 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 3.2%.
Illumina Inc ILMN.O fell 14% after the gene sequencing
company said it would pay $8 billion in cash and stock to buy
cancer screening startup Grail Inc.