Wall Street sinks 3%, Dow at late July lows as pandemic surges

In this news, we discuss the Wall Street sinks 3%, Dow at late July lows as pandemic surges.

NEW YORK (Reuters) – US stocks fell on Wednesday as the Dow Jones closed at lows last seen in late July, as coronavirus cases skyrocketed around the world and investors worried about the possibility of a contested US presidential election next week.

The spiraling pandemic and Washington’s inability to strike a deal on another fiscal stimulus ahead of the Nov. 3 election led all three stock indexes to close more than 3% lower in heavy trading.

The sell-off accelerated in the closing minutes of the session, with the Dow and the benchmark S&P 500 posting their biggest single-day declines since June 11.

Twelve U.S. states set records for hospital patients with COVID-19, while Germany and France have announced plans to shut down large swathes of public life for a month as the pandemic escalates across Europe .

“Obviously, the virus is out of control. It’s a spike, it’s bad, ”said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago. “The concept that … this will go away is just a flawed assumption.”

Shares of hotels, airlines and other leisure-related companies sensitive to COVID-19 turbulence fell, with the S&P 1500 .SPCOMAIR airline index falling 4.3%. The .SPNY energy index slipped 4.2% as oil prices fell on fears of a deeper drop in fuel demand. [O/R]

With just six days before the election, Wall Street’s .VIX fear gauge has reached its highest level since June 15. Fears that a winner might not be declared on the night of November 3 also boosted the sell-off.

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Democratic challenger Joe Biden leads President Donald Trump nationally by 10 percentage points, according to a Reuters / Ipsos poll, but competition is tighter in the swing states, which will decide the winner.

Investors are concerned about a number of potential outcomes: that the election may be contested; a “blue wave” gives Biden victory and his Democrats in control of Congress; or Trump be re-elected, said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.

“As people go through the probable scenarios of what could happen with the election, there is no right answer in the short term,” he said.

The losses were widespread with tech stocks .SPLRCT, down 4.33%, weighing the most.

Great Tech companies – Apple AAPL.O, Alphabet GOOGL.O and Facebook FB.O – which are due to release results on Thursday, have all fallen 4.6% or more. Along with Microsoft MSFT.O and Amazon.com AMZN.O, they weighed the most on the S&P 500.

The Dow Jones Industrial Average .DJI fell 943.24 points, or 3.43%, to 26,519.95, the S&P 500 .SPX fell 119.65 points, or 3.53%, to 3,271.03 and the Nasdaq Composite .IXIC fell 426.48 points, or 3.73%, to 11,004.87.

The volume on the US stock exchanges was 11.00 billion shares.

According to data from Refinitiv, of the 206 S&P 500 companies that have reported third quarter profits so far, about 83% have beaten expectations. But profits on average are expected to fall 14.8% from a year earlier.

General Electric Co GE.N was on the bright side, jumping 8% after posting surprise quarterly profit and positive cash flow from cost reductions and improved operations in the energy and power sector. renewable energies.

Falling issues outnumbered those that rose on the NYSE by a 10.08 to 1 ratio; on the Nasdaq, a ratio of 6.28 to 1 helped the declines.

The S&P 500 posted a new 52-week high and nine new lows; the Nasdaq Composite recorded 15 new highs and 110 new lows.

Reporting by Herbert Lash, additional reporting by Medha Singh and Shivani Kumaresan in Bengaluru; Sinead Carew and Lewis Krauskopf in New York; Editing by David Gregorio, Anil D’Silva and Arun Koyyur

Original © Thomson Reuters

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