July 19 (Reuters) - The Dow and the S&P 500 indexes sank more than 2% on Monday as investors sold off economically sensitive shares and travel stocks and sought the perceived safety of bonds on fears that a spike in COVID-19 cases would derail a broader economic recovery. New infections surged in parts of Asia and England, while U.S. COVID-19 cases soared 70% last week, fueled by the Delta variant. read more All 11 S&P sectors fell, with the so-called value stocks, including financial (.SPSY), industrial (.SPLRCI), materials (.SPLRCM) and energy (.SPNY), dropping between 2.5% and 4.4%. The banking sub-index (.SPXBK) sank 3.4%, tracking a fall in the benchmark 10-year Treasury yield to mid-February lows. "There"s concern among investors the Delta variant could reset the clock in terms of the progress we"ve made with COVID-19 and the pickup in the economy," said Andre Bakhos, managing director at New Vines Capital LLC in New Jersey. The benchmark S&P 500 (.SPX) snapped a three-week winning streak on Friday, with only defensive sectors, perceived to be relatively safe during times of economic uncertainty, posting small gains. On Monday, the technology-heavy Nasdaq index (.IXIC) outperformed the broader market as investors again flocked to the growth-linked stocks that led Wall Street"s recovery from its coronavirus-lows last year. "This is a way for investors to hedge the risk of COVID-19," said Max Gokhman, head of asset allocation at Pacific Life Fund Advisors in Newport Beach, California. "We know the tech stocks will tend to do better when there"s less stability, as they are less sensitive to consumers increasing their spending on services and going out." Still, by 01:40 p.m. ET, the Nasdaq Composite (.IXIC) lost 1.40%, to 14,224.71. By comparison, the Dow Jones Industrial Average (.DJI) fell 904.77 points, or 2.61%, and was on track for its worst session since October 2020, while the S&P 500 (.SPX) slipped 2.04% and was set for its biggest one-day percentage fall since May. Economically sensitive small caps (.RUT) and transports (.DJT) were down 1.6% and 1.8% respectively. The CBOE volatility index (.VIX), dubbed Wall Street"s fear gauge, jumped to a two-month high. Shares of travel-related companies, which had just begun to climb after suffering steep losses during pandemic-driven lockdowns last year, fell again on Monday. The S&P 500 Airlines sub index (.SPLRCAIR) slumped nearly 4%. Cruiseliners Royal Caribbean Group (RCL.N), Carnival Corp (CCL.N) and Norwegian Cruise Line (NCLH.N) dropped between 4.6% and 5.9%. After strong quarterly reports from big banks last week, focus now shifts to tech earnings with companies including IBM (IBM.N), Netflix (NFLX.O), Texas Instruments (TXN.O) and Intel (INTC.O) set to report this week. U.S.-listed shares of Alibaba Holding , Baidu and ridesharing app Didi Global (DIDI.N) declined between 2% and 7.1% on renewed fears of anti-monopoly action against major technology firms. Zoom Video Communications Inc (ZM.O) slipped 4.2% after the teleconferencing services provider announced a $14.7 billion all-stock deal to buy cloud-based call center operator Five9 Inc (FIVN.O). read more Five9"s shares jumped 4.6%. Declining issues outnumbered advancers by a 6.6-to-1 ratio on the NYSE and by a 3-to-1 ratio on the Nasdaq. The S&P 500 posted 12 new 52-week highs and no new lows while the Nasdaq recorded 39 new highs and 246 new lows.