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Wall Street tumbles as virus cases soar, stimulus hopes fade

Stock Markets Oct 26, 2020 01:05PM ET
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© Reuters. FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City

By Medha Singh and Shivani Kumaresan

(Reuters) - U.S. stocks decline picked pace on Monday afternoon, setting the Dow for its worst day in more than seven weeks, as soaring coronavirus cases and a political deadlock over the fiscal relief bill raised doubts about the fate of the economy recovery.

New infections have touched record levels in the United States, with El Paso in Texas asking citizens to stay at home for the next two weeks. In Europe, Italy and Spain imposed new restrictions.

Travel-related stocks, vulnerable to COVID-19 related curbs, dropped. The S&P 1500 airlines index fell 5% and cruise line operators Carnival (NYSE:CUK) Corp and Royal Caribbean (NYSE:RCL) Cruises Ltd shed more than 9.5% each.

"People are nervous about the expansion in cases," said Christopher C. Grisanti, chief equity strategist, MAI Capital Management, Cleveland, Ohio.

"The administration has said it does not want to slow down the economy yet as cases rise they may not have a choice."

Energy index tracked a more than 3% fall in oil prices. Other economically-sensitive industrials and financials sectors posted the steepest percentage declines among S&P sectors. (O/R)

Meanwhile, chances of a fiscal stimulus before the presidential election faded as U.S. Treasury Secretary Steve Mnuchin said there were a number of areas in House Speaker Nancy Pelosi's plan that President Donald Trump cannot accept.

Wall Street's fear gauge hit a near seven-week high even as 60 million Americans voted in a record breaking early turnout as Trump and his Democratic challenger Joe Biden enter their final week of campaigning.

It is also one of the busiest weeks of the third-quarter earnings season that will see results from mega-cap U.S. tech firms including Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN), Google-parent Alphabet (NASDAQ:GOOGL) Inc and Facebook Inc (NASDAQ:FB).

The tech sector, which includes Apple, is among the only three sectors apart from healthcare and consumer staples that is expected to post an increase in profit compared to a year earlier.

Of the 139 companies in the S&P 500 that have reported earnings so far, 83.5% of them have beaten Wall Street expectations, according to Refinitiv data. At 12:30 p.m. ET, the Dow Jones Industrial Average fell 767.14 points or 2.68% to 27,577.43, the S&P 500 lost 73.59 points or 2.11% to 3,392.13 and the Nasdaq Composite lost 201.99 points, or 1.75% to 11,347.51.

Software company Oracle Corp (NYSE:ORCL) fell about 4% after German rival SAP abandoned medium-term profitability targets and warned of a longer than expected recovery time from the pandemic hit.

Hasbro Inc (NASDAQ:HAS) tumbled 10% as quarterly adjusted revenue fell due to coronavirus-led delays in the production of movies and TV shows.

Companies deemed stay-at-home winners including Amazon.com Inc, Zoom Video Communications (NASDAQ:ZM) Inc and video game companies Activision Blizzard Inc (NASDAQ:ATVI) and Take-Two (NASDAQ:TTWO) Interactive Software Inc rose between 2.2% and 0.3%.

Declining issues outnumbered advancers for a 7.91-to-1 ratio on the NYSE and for a 5.00-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and two new lows, while the Nasdaq recorded 24 new highs and 38 new lows.

Wall Street tumbles as virus cases soar, stimulus hopes fade
 

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Comments (22)
Clinton Powell
Clinton Powell Oct 27, 2020 1:24AM ET
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Why cant Nancy Pelosi get the virus? Come on man
David David
David9 Oct 26, 2020 4:00PM ET
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Please send me my $1,200 check....
Raksaksa Tonne
Raksaksa Tonne Oct 26, 2020 3:27PM ET
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This stimulus thing is like drinking coffee to stay awake. After many cups, they cease to work, become toxic, and it all ends in a crash.
Joshhua Ray
Joshhua Ray Oct 26, 2020 3:27PM ET
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Starbucks 🌟📈 is one of the most successful companies known; without coffee ☕ H20 would just be water 💦 and we would bath in drugs! 📈🌟🇺🇲📈
Thom Miller
Thom Miller Oct 26, 2020 2:40PM ET
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Big 10 football is all girlie girl players. All little pansies. The Big 10 couldn’t carry Donny’s jockstrap.... now there’s a disgusting image! Ugh! But I bet Matt could and would carry it!
Ali Scander
Ali Scander Oct 26, 2020 2:27PM ET
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I think a lot of people are selling this week since election day is coming up next week. VXX could go up a lot this week too.
Phil Carroll
Phil Carroll Oct 26, 2020 1:51PM ET
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Look at the buffet indicator, it’s all you need to know!
George Pichurov
George Pichurov Oct 26, 2020 1:46PM ET
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really? I thought market was already pricing this in...Or can market be wrong..or irrational :o ?
Darren Hunt
Darren Hunt Oct 26, 2020 1:40PM ET
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shut down economy and pay me money to stay at home forever. sounds sustainable
Jack Galloway
Jack Galloway Oct 26, 2020 1:17PM ET
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Nonsense
Brad Dover
Brad Dover Oct 26, 2020 1:12PM ET
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This is setting up just like it did in 2007 before the huge market crash....I expect the market to lose 60 percent of its value soon trump is by far the worst disaster in Americans history CHINA has FOUR times the population of the USA yet is ranked 53rd in the number of COVID infections.....meanwhile, the USA is ranked number ONE and by a lot too.......this is why the stock market is crashing now because of the massive second wave much worse than the first......and its all trumps fault
Jacob Steinschlag
Jacob Steinschlag Oct 26, 2020 1:12PM ET
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While it's surely Trumps fault, the market will no way crash 60%.
Jeff Bernardi
Jeff Bernardi Oct 26, 2020 1:12PM ET
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Trump Family are going to be US Royalty. King Donald, Queen Melania.
Joshhua Ray
Joshhua Ray Oct 26, 2020 1:12PM ET
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Where are you getting your communist news? Trump is 🇺🇲 and what 🇺🇲 is all about! 🐟
 
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