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.