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Dow Slumps as Record Surge in Infection Triggers Bloodbath

Published 10/26/2020, 01:32 PM
Updated 10/26/2020, 02:57 PM
© Reuters.

© Reuters.

By Yasin Ebrahim

Investing.com –The Dow fell sharply Monday, paced by a rout in value stocks on fears the recent spike in Covid-19 infections could weigh on the economic recovery amid fading hopes for U.S. stimulus before the election.

The Dow Jones Industrial Average fell 2.7%, or 754 points. The S&P 500 was down 2.6 %, while the Nasdaq Composite fell 1.9%.

Coronavirus infections in the U.S. hit a record, adding more than 85,000 through Saturday, Bloomberg reported, after surpassing the previous record on Friday of 83,757 new cases.

Little sign of progress on stimulus talks, meanwhile, dimmed expectations the economy would receive a fiscal boost before the U.S. election on Nov. 3.

House Speaker Nancy Pelosi is reportedly waiting for another counteroffer from Treasury Secretary Steven Mnuchin, but as there remains sizable disagreement over key issues “reaching a deal ahead of the November election appears improbable, if not entirely impossible,” Stifel said in a note. Pelosi is reportedly set for further talks with Mnuchin at 2:00 PM ET (1800 GMT).

Energy and industrials led the move lower in value stocks, with the latter down on heavy selling in airline stocks as the spike in cases raised concerns that restrictions to curb infections could prompt airlines to cut capacity further. 

American Airlines (NASDAQ:AAL) and Delta Air Lines (NYSE:DAL) were down 6% while United Airlines Holdings Inc (NASDAQ:UAL) slumped 7%.

Financials gave up some of their gains from last week as banking stocks were abandoned after Treasury yields reversed sharply, with United States 10-Year down 5%.

JPMorgan Chase (NYSE:JPM) fell 3%, while Bank of America (NYSE:BAC) and Citigroup (NYSE:C) slipped 2%.

Tech, which had led the rally since the mid-March bottom, added to the broader market selloff, with the Fab 5 nursing losses.

Amazon.com (NASDAQ:AMZN) was flat, Apple (NASDAQ:AAPL) fell 1%, while Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) fell 3%.

Facebook, meanwhile, said it would launch a game streaming service to rival Google’s cloud gaming service Stadia.

Positive news on the vaccine front from AstraZeneca, meanwhile, did little to keep losses in check.

AstraZeneca PLC ADR (NYSE:AZN) rose more than 1% after the company said its coronavirus vaccine candidate had triggered an immune response in both younger and older adults.

On the economic front, the rapid growth in housing activity slowed in September, with some warning of further slowing to come. New home sales fell to 959,000 units last month from 994,000 a month earlier, missing forecasts of 1 million.

"The single-family housing market is still registering strong demand … however, record-low supply is pushing up prices even faster, which is hindering potential buyers from affording new homes,” said Grant Thornton Economist Yelena Maleyev. "This will be exacerbated by the lack of additional COVID-19 support from Congress; the scars of this recession will run deep," Maleyev added.

Latest comments

-2% bloodbath, it will make +3% on any hope
No no, not true. The covid pandemic is over. The President said so... lol
What level would be reasonable for the S&P if we do not get anymore stimulus ?
Well, judging off this nation’s 98.2% debt to GDP ratio, 98.2% lower.
fire all the politicians
fire all the politicians
Market has zero business anywhere near ATH - min 10% risk-off before election
Are you shorting it?
In India people are roaming freely even without masks. No increase in the inflections. But, then why the infection figures are increasing in USA and European countries? This may cause a March like crash again.
India is 2nd worst country in the world behind the US in terms of infections and deaths. You're assertion is false.
My sister lives in India. They have been locked down for over 6 months. I have no clue what you are talking about or why you would lie about something that is easy to disprove.
This is a classic bear trap in the making. If you live in a Red State, be especially cautious. The median value of a Red State 401(k) is only about $18,000, compared to a median value in the Blue States of about $27,000. So people in Red States are much more vulnerable than elsewhere. Donny says everyone’s 401(k) has “sky rocketed.” Not true over the past 8 months. Besides, with a Total US 401(k) median value of only $22,000, even if the level were to double, the typical American would be able to live on that for only a few years....even in the backwater, medically-challenged, high-obesity, under-educated, Red States.
Bloodbath...Haha. I call this a buying opportunity. Over the next week I'll be buying V, PYPL, HD, MSFT....I love a sale.
I agree. Did not buy in today, as there may be another dip tomorrow. PYPL and BAC look ripe for buying.
I wonder what countries that are doing fine are actually doing (or the lack of corruption there) to keep numbers down. UAE, New Zealand, Estonia, Iceland, South Africa, Luxemboourg, Norway, S. Korea, Autralia, Greece...
America being honest? hahahahahahahahahahaha not a chance in ****
Yeah, those country’s presidents didn’t politicize wearing masks.
nah mate, over here in Oz, most of the country is doing very well. working, pubs etc all fine and dandy
tomorrow headline will be stock markets surge on hopes of vaccine and economic stimulus after election
Possibly.
Who would have ever guessed...a big selloff right before the election. Wallstreet wants a Biden victory so bad.
Bloodbath? I thought we were “rounding the corner”? Donny lied to us?
same headline everyday. getting a bit old...
Look at the pic. They still don’t wear masks!
Chill, that picture is prolly from 2015
I love that dude.
be careful what you believe. Where I'm from 🇬🇧 people booked for the test but didn't turn up for whatever reason. 2 days later get a letter saying they tested positive. summing fishy going on.
circuit
I saw the title and was “who’s dead?” Then “oh” jebaited
stimulus hopes & election won't allow market to go down much.. buy on dips
When it dips below S&P 2000 I may be buying with you.
I see mango plunge protection team started buying at about 12:45 CST. Crash canceled. Printer go brrrrrrrrr
its bad, the super rich; Bezos , Paul McCartney, Be generous with the poor children; Pay medicine, Sir ... woke up to songs; Give Back! show decensy, charity, generosity, people suffer, he knows, new world order: those who can, give!
Bloodbath is when stonks are down, not when stonks are at their previous ath from pre-pandemic..  Wake me up when the limit down triggers are hit.
lazy trendy word for stock. Empowers people to feel as if they are high society, not sure why such is appealing.
 The market stonks today...
What's a stonk. It aint like a wonk?
Don't worry HOPE will bring us back from the brink.  It always does.  Keep hoping people.  Biden will fix all the problems, in between naps of course.
no president has fixed all problems. and this virus is not necessarily any president's fault
According to the gospel of Biden it is and he is as old as the Bible so he would know.
 If you invest like you judge people I assume you are broke! Joe Biden is a lifelong career politician that is corrupt as can be! If you are smart enough to be in the stock market you should be smart enough to see that China and the Ukraine do not want anything from Hunter Biden other than access to his father the VP in charge of foreign affairs at the time! Hunter Biden has nothing to offer these in exchange for billions in investments and millions in pay offs! Hunters own business party Bubinski is speaking up because Hunter ripped him off!
It's time to buy. All in.
jp morgan sell all in the mornig with the fake news of trump, NO stimuli , munich confirmed , GAme over , A big red coming to 3 november
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