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Dow Ends Below 27K as Virus Spike Triggers Biggest Selloff Since July

Stock MarketsOct 28, 2020 04:03PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The Dow suffered its biggest one-day decline since July on Wednesday, as fears of renewed lockdown measures intensify. 

The Dow Jones Industrial Average fell 3.43%, or 940 points, its biggest one-day loss since July 31. The S&P 500 was down 3.52%, while the Nasdaq Composite slumped 3.73%.

France and Germany announced new lockdown measures starting Friday and Monday, respectively, with bars and restaurants set to shut while schools will remain open, as both countries strive to curb a sharp rise in Covid-19 infections.

In the U.S., meanwhile, there are signs some areas are considering rolling back the easing of lockdown measures after Chicago prohibited indoor dining.

Global infections have topped 44 million, with more than 350,000 cases reported a day earlier.

The selling in the broader market was led by technology as stalwarts come under the spotlight on Capitol Hill ahead of key earnings reports from Amazon, Facebook, and Google.

The chief executives of Facebook, Twitter and Google are making their case to lawmakers to uphold section 230 of the Communications Decency Act, a law that protects platforms against legal liability for content generated by its users.

Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB) (NASDAQ:GOOGL) and Microsoft  (NASDAQ:MSFT) were deep in the red, closing 5% lower despite firmer quarterly results.

Wall Street, however, continued to give Microsoft their vote of confidence as its cloud business continued to grow.

"Overall, we believe Microsoft’s results (especially post SAP’s guide down) will assuage some investor concerns around the IT spending backdrop," Credit Suisse (SIX:CSGN) said after raising its price target on the stock to $235 from $225.

With the impact of the pandemic gathering pace, cyclical stocks – those linked to the economy - also played a meaningful role in the selloff, with consumer discretionary and energy among the biggest decliners.

Energy fell 4%, led by a sharp decline in oil prices as data showing a larger-than-expected weekly build in U.S. inventories exacerbated concerns about the demand outlook.

Industrials continued to bleed, led by fall in airlines, with United Airlines (NASDAQ:UAL) and Boeing (NYSE:BA) falling more than 4% despite the latter reporting a smaller than expected loss of $1.39 per share for the third quarter.

General Electric (NYSE:GE) sidestepped the selling, up 7% after reporting a surprise third-quarter profit.

Elsewhere on the earnings front, United Parcel Service Inc (NYSE:UPS) fell 9% as a lack of guidance and higher costs overshadowed third-quarter results that topped analysts' estimates.

The sharp sell-off in the broader market was captured by a surge in the CBOE Volatility Index, or so-called fear index, to a more than four-month high. 

Dow Ends Below 27K as Virus Spike Triggers Biggest Selloff Since July
 

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Comments (15)
Magno Fernandes
Magno Fernandes Oct 28, 2020 8:42PM ET
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So, why DJ futures is + 0,8% now.
Plopseven Schwartz
Plopseven Schwartz Oct 28, 2020 8:42PM ET
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So you don’t panic sell before the hedges
Ryan Diehlman
Ryan Diehlman Oct 28, 2020 7:52PM ET
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The market has become a political toy. Cash out, payoff your house and all debt. Stop paying extra taxes and interest.
New Jazenevd
New Jazenevd Oct 28, 2020 7:52PM ET
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Sorry, man. It is a futile dream. They will find you and “ask” to pay taxes. Market is the way to protect wealth, about the only one left. Cash will be destroyed by government printing press.
Cogito Ergo sum
Cogito Ergo sum Oct 28, 2020 7:28PM ET
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OMG.....Hunter Biden hunted one of Ovama's daughters ????
New Jazenevd
New Jazenevd Oct 28, 2020 6:56PM ET
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Every market pullback/correction comes with two inevitable “complaints”: Firstly comes first complaint while pullback is still around “I bought too soon”. A bit later when pullback ends, second complaint comes in “I could buy more”. That’s real stock investment 101.
New Jazenevd
New Jazenevd Oct 28, 2020 6:33PM ET
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Big buying opportunity.
Tom Daniel
Tom Daniel Oct 28, 2020 6:33PM ET
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Soon. Very soon. We'll likely leg down again
New Jazenevd
New Jazenevd Oct 28, 2020 6:33PM ET
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Tom Daniel  it is always another leg around the corner. However, perfect timing is never achievable. It is better to buy a bit sooner  than not buying at all.
Christopher Dunson
Christopher Dunson Oct 28, 2020 6:17PM ET
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Fake 'spike'. Cases are meaningless.
James Miller
James Miller Oct 28, 2020 6:17PM ET
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My next door neighbor passed away from covid this morning, real spike and real virus
Tom Daniel
Tom Daniel Oct 28, 2020 6:17PM ET
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James Miller And? Sorry about that but people die everyday. Like 150k. So what?
Danny Danny
Danny Danny Oct 28, 2020 6:17PM ET
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James Miller people die from other stuff too, like diarrhea for example. Kills over 2200 children daily. Around 801k die every year. Imagine if we have a diarrhea spike...
Space Lord
Space Lord Oct 28, 2020 5:31PM ET
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When the darkness enters into your room, close your eyes and imagine a sweet angel  “stimulus hope”
pet kur
PeterKuram Oct 28, 2020 5:31PM ET
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Well, that made me smile. Best thing I seen here for a while now.Thanks.
Fernando Lazarini
Fernando Lazarini Oct 28, 2020 5:31PM ET
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hahahhahahahahahaha
Justin Marshall
Justin Marshall Oct 28, 2020 5:30PM ET
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what virus spike?
Attila Bakk
Attila Bakk Oct 28, 2020 5:01PM ET
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The “hope rally” was nothing more than a setup for the big short, messy election incoming - please trade responsibly
lWilliam Mims
lWilliam Mims Oct 28, 2020 4:53PM ET
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market doesn't fear covid, it fears Biden victory
Plopseven Schwartz
Plopseven Schwartz Oct 28, 2020 4:53PM ET
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Well that means Trump has no control over markets any more? 🚀🚀🚀
John Thompson
John Thompson Oct 28, 2020 4:44PM ET
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Nice pic the dudes face says it all free fall
gary Gould
gary Gould Oct 28, 2020 4:20PM ET
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fear mongering Republicans..Americans are big on fear mongering ..its hiw they control their population
Show previous replies (3)
Alberto Vazquez
Alberto Vazquez Oct 28, 2020 4:20PM ET
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Another Hybrid Demorobot
Oilyhand Dan
GulfCoastGold Oct 28, 2020 4:20PM ET
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"Fear mongering Republicans" that honestly blows my mind anybody could have their head buried so far in the ground to make such a backassward statement
James Sheehan
James Sheehan Oct 28, 2020 4:20PM ET
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you people are all extremely dense
Tom Daniel
Tom Daniel Oct 28, 2020 4:20PM ET
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Cogito Ergo sum
Cogito Ergo sum Oct 28, 2020 4:20PM ET
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Good english for Chin* chan* chon*
Thiago Henri
Thiago Henri Oct 28, 2020 4:17PM ET
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Nice good news...thanks for your great job Yasin ,,,,
Space Lord
Space Lord Oct 28, 2020 4:12PM ET
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You don’t know what fear look like
Hunter Gassaway
Hunter Gassaway Oct 28, 2020 4:12PM ET
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ohhh so scary...
Jay West
Jay West Oct 28, 2020 4:10PM ET
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More like fear of Biden. Such sinful slanted media.
 
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