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, Reuters informed.
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 Corp and Royal Caribbean 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, Amazon, Google-parent Alphabet and Facebook.
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.
Companies deemed stay-at-home winners including Amazon, Zoom Video Communications and video game companies Activision Blizzard and Take-Two Interactive Software 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.
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