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Tech slide hits Wall Street as coronavirus cases spiral

Published 10/30/2020, 06:51 AM
Updated 10/30/2020, 01:10 PM
© Reuters. The New York Stock Exchange is pictured

© Reuters. The New York Stock Exchange is pictured

By Medha Singh and Shivani Kumaresan

(Reuters) - Wall Street's major indexes tumbled on Friday, dragged down by a slide in shares of tech heavyweights following their quarterly results, with a record rise in coronavirus cases and nerves over the presidential election adding to a downbeat mood.

The three main indexes were on course for their worst week since March on prospects of wider COVID-19 restrictions in Europe, while surging cases in the United States pushed hospitals to the brink of capacity.

The CBOE volatility index held at a 20-week high ahead of the final weekend before Election Day on Tuesday.

"We're two market days away from Election Day and people want to make sure that they're not completely caught off guard," said Pete Santoro, a Boston-based equity portfolio manager at Columbia Threadneedle.

Apple Inc (NASDAQ:AAPL) tumbled about 5.5% after it posted the steepest drop in quarterly iPhone sales in two years due to the late launch of new 5G phones.

Amazon.com Inc (NASDAQ:AMZN) fell 4.7% after it forecast a jump in costs related to COVID-19, while Facebook Inc (NASDAQ:FB) shed 5.7% as it warned of a tougher 2021.

Tech and consumer discretionary sectors posted the steepest percentage declines.

Communication services got a boost from a 4.4% jump in shares of Alphabet (NASDAQ:GOOGL) Inc after the Google parent beat estimates for quarterly sales as businesses resumed advertising.

"There is a big selloff in those big tech names because they didn't live up to the hype and people are really worried about next week's election," said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

President Donald Trump has consistently trailed Democratic challenger Biden in national polls for months, but polls in the most competitive states have shown a closer race.

At 12:32 p.m. ET the Dow Jones Industrial Average fell 239.82 points, or 0.90% to 26,419.29, the S&P 500 lost 41.73 points, or 1.26% to 3,268.38 and the Nasdaq Composite lost 237.30 points or 2.12% to 10,948.30.

The third-quarter earnings season is past its halfway mark, with about 86.2% of S&P 500 companies topping earnings estimates, according to Refinitiv data. Overall, profit is expected to fall 10.3% from a year earlier.

Twitter Inc (NYSE:TWTR) slumped about 20% after the micro-blogging site added fewer users than expected and warned the U.S. election could impact ad revenue.

AbbVie Inc (NYSE:ABBV) gained 4.3% after the drugmaker raised its full-year profit forecast, bolstered by signs of recovery in demand for its Botox injection.

Declining issues outnumbered advancing ones on the NYSE by a 2.3-to-1 ratio, while on Nasdaq, a 0.4-to-1 ratio favored decliners.

© Reuters. The New York Stock Exchange is pictured

The S&P 500 posted three new 52-week highs and one new low, whereas the Nasdaq Composite recorded 16 new highs and 76 new lows.

Latest comments

"Tech" = great phones. (sad.)
Why don't these articles ever say WHO is getting the virus? Nursing home residents, people in maskless crowds, college partiers?
3% deathrate, sure, this is because of the virus, more articles like this one
Don't think lockdown is likely as the fatal rate continuously dropping!
the exact opposite is happening of this post. numbers going up, lockdowns spreading.
lockdowns in EU, which we don’t care. US never left such lockdown
Jo Pa has attended one too many Trumper LiarFests....
this will be with us for at least 4 years, that is how long the Democrats cry about a republican presidency. 😚
Wallstreet got tipped off of second lockdown - simple as that
after voting, a lot of cases will reduce immediately
says the one coming with a country with 0 cases. You don't even know how bad it is out there, do you
Jacob youre a loser just lock yourself in the basement if youre scared
Just deny facts and disregard science and endanger yourself and others like a fool.
Unbelievable, even as me cases BREAK RECORDS, still there's people that try to minimize the FACT counting deaths. Just wait until they cannot be treated the same like Trump and tell me, if you're alive of course.
Cases from testing not deaths..
Deaths are also breaking records.
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