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Wall Street tumbles as virus cases soar, stimulus hopes fade

Published 10/26/2020, 06:48 AM
Updated 10/26/2020, 01:05 PM
© Reuters. FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City

© 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.

© Reuters. FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City

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.

Latest comments

Why cant Nancy Pelosi get the virus? Come on man
Please send me my $1,200 check....
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.
Starbucks 🌟📈 is one of the most successful companies known; without coffee ☕ H20 would just be water 💦 and we would bath in drugs! 📈🌟🇺🇲📈
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!
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.
Look at the buffet indicator, it’s all you need to know!
really? I thought market was already pricing this in...Or can market be wrong..or irrational :o ?
shut down economy and pay me money to stay at home forever. sounds sustainable
Nonsense
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
While it's surely Trumps fault, the market will no way crash 60%.
Where are you getting your communist news? Trump is 🇺🇲 and what 🇺🇲 is all about! 🐟
Ilusion deal. Sell flesh before you see ribs
Am I the only one that gets the impression that these discussions are simply pre-election "window-dressing" and that  there will be no agreement on Stimulus until after the Presidential elections?
Been thinking that for weeks now. It's virtually impossible to reach a deal before elections
There is no stimulus, this is part of the new world order. Pandemic plus economy distress.
Why does Trump sign a stimulus bill if it's his lame duck session? Unless he sees something personally in it or there's a veto-proof majority, the whole thing could be pushed off to Feb 2021.
No stimulus is coming. You guys have the attention span of flies.
what is that deal?stimulus?explain it please.
Why are people in the USA so sick (in mind and body)? Because they eat, breathe, and live junk. You are what you do, breathe, eat and live. Old saying. No surprise here. Was all predictable
What keeps Americans sick? Electro-smog. Good luck fixing THIS ONE. Electro-smog was rumoured to be at the root of Wuhan as well.
 RET/RD alert! *hitting the triangle*
Virus cases soar as testing increases. If we tested everyone at once it would show an incredible hundred million cases. Cases that will pass. We have 380 million Americans, soon we will have all of them covered. So what is the point of selling stocks every time we learn we tested more people? People are such sheep. Then to add to their sheep-like panic the left-wing media acts as if cases are deaths. Sheep don't even figure it out.
not how that works, you sound like a fool
People are compelled to get test when they fall ill. That is why cases are increasing. we STILL have no widespread testing available. Therefore the higher testing = higher cases claim is false. It has always been false.
Just buy as much Smith and Wesson (SWBI) as you can and sit back and watch the show.
The Big Dip is coming
what dip?
Who writes this drivel... uggghhh. I want this job, its as easy as copy and pasting
Either AI is writing it or an intern
agree! everyday stimulus
Nancy... Americans are hurting... stop jamming green new deal and bail outs for horribky run blue cities... the other states dont exist to bail out policy failures of ny, cali, illinois... people are leaving in droves
Quit mischaracterizing what is actually happening.
tomorrow headlines will be "stock markets surge on vaccine hopes" rinse and repeat
Or even today but about the stimulus talks bla bla bla...
As for the stimulus thing even if Trump signs, it will be sitting at that old man with the rotten hands office till elections are over.
next several US presidents will be over 70 - 80 y.o before their inaguration. old man - dead hand. Thats the USA destiny.
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