Market Snapshot Archives | Email alerts

Oct. 26, 2020, 5:22 p.m. EDT

Dow ends 650 points lower as rising COVID-19 cases, stalled stimulus efforts highlight recovery jitters

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Dow Jones Industrial Average (DJIA)
  • X
    S&P 500 Index (SPX)
  • X
    NASDAQ Composite Index (COMP)

or Cancel Already have a watchlist? Log In

By William Watts and Sunny Oh

Stocks finished off session lows, but still logged sharp losses Monday as COVID-19 cases in the US. and Europe surged and a final agreement on a new round of fiscal spending remained elusive, reflecting the lingering risks thwarting the economic recovery.

The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.58% fell 650.19 points, or 2.3%, to finish at 27,685.38, after falling more than 900 points at its session low. The S&P 500 /zigman2/quotes/210599714/realtime SPX -0.16% dropped 64.42 points, or 1.9%, to end at 3,400.97, while the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.48% declined 189.34 points, or 1.6%, to close at 11,358.94.

The Dow’s fall was its biggest one-day point and percentage drop since Sept. 3, while the S&P 500 suffered its biggest decline since Sept. 23.

The Dow fell 1% last week, ending Friday at 28,335.57, while the S&P 500 saw a 0.5% weekly fall to end at 3,465.39. The Nasdaq dropped 1.1% for the week, closing Friday at 11,548.28. The weekly declines were the first in three weeks for the S&P 500 and Dow and the first in four weeks for the Nasdaq.

New COVID-19 infections continued to rise in the U.S. while Europe saw Spain and Italy impose tighter restrictions on activity in an effort to contain a surge in new cases. Meanwhile, drawn-out talks on a new round of aid spending appeared increasingly unlikely to bear fruit.

“Coronavirus worries are back. The U.S.’s seven-day average of new COVID cases hit an all-time high, and infections are rising in other parts of the world, just as it is getting chilly outside,” said Lindsey Bell, chief investment strategist at Ally Invest, in a note.

“And the timing of a vaccine continues to be crucial, but elusive, adding to concerns about economic prospects,” she said.

The U.S. saw 83,757 new cases of COVID-19 on Friday, topping the previous high of 77,632 seen on July 16, and reported more than 80,000 cases again on Saturday, The Wall Street Journal reported , citing data compiled by Johns Hopkins University. The U.S. saw more than 60,000 new cases on Sunday — the tally tends to fall at the start of a week due to lower testing rates over weekends.

The seven-day moving average of new cases was 68,767, the report said, citing Johns Hopkins data, compared with a 14-day moving average of 62,387. When the seven-day average exceeds the 14-day, it indicates that cases are rising.

“Rising virus counts and surging numbers in Europe have investors in a cautious mood. They should be careful, as any serious surge will cause a decline in the pace of economic recovery. But a surge won’t last forever. Hopefully, the economic damage will be a slowdown in the pace of recovery and not a reversal,” said James Meyer, chief investment officer of Tower Bridge Advisors.

House Speaker Nancy Pelosi, in a letter to her fellow House Democratic colleagues, on Monday disclosed no signs of movement and criticized the White House for what she described as its lack of follow-through on fighting coronavirus.

See: ‘It’s about midnight’ for stimulus deal, key GOP senator says

Investors have said the chance of a Democratic sweep of both chambers of Congress and the White House means large fiscal spending measures are still on the table next year. But some market participants say even those who believe in the so-called blue sweep narrative, may be getting nervous as the likelihood of a split Congress could frustrate hopes for aggressive spending from Washington.

In One Chart: Stocks usually rally in final 8-day stretch of presidential election races, history shows

“These trades get reassessed now as fiscal gets questioned here. Doubts creep in and positions will be adjusted to run a more neutral setting,” said Chris Weston, head of research at Pepperstone, in a note.

Investors are bracing for a deluge of quarterly earnings in the week ahead, including reports from more than a third of the S&P 500, including tech-related highfliers Facebook Inc. /zigman2/quotes/205064656/composite FB -0.48% , Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN +2.15% , Apple Inc. /zigman2/quotes/202934861/composite AAPL +0.75% , Microsoft Corp. /zigman2/quotes/207732364/composite MSFT +0.0047% and Google parent Alphabet Inc. /zigman2/quotes/205453964/composite GOOG +0.14% /zigman2/quotes/202490156/composite GOOGL +0.01% .

See: Stock-market investors brace for busiest week of earnings in October’s final hurrah

Tech stocks were taking the least of the market’s losses on Monday, with stocks in economically sensitive industries showing the biggest declines.

The energy sector was the hardest hit, with the Energy Select Sector SPDR ETF /zigman2/quotes/206420077/composite XLE -2.33% , down 3.6%. Travel-related shares were also hit, with airline stocks suffering a broad selloff and cruise-line operators among the worst performers in the S&P 500, with Royal Caribbean Group /zigman2/quotes/208854639/composite RCL -1.90% shares ending with a loss of nearly 10% and Carnival Corp. /zigman2/quotes/202325446/composite CCL +2.08% stock down 8.7%.

Also read: Ready for another Big Tech hearing/earnings double-header?

In U.S. economic data, September home sales unexpectedly slowed, falling 3.5% to a 959,000 annual pace. The Chicago Fed’s national activity index for September came in at a reading of 0.27, down from 1.11 in August.

The yield on the 10-year Treasury note /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +0.37% fell 4.2 basis points to 0.799%. Bond prices move in the opposite direction of yields.

The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.22% fell 0.8%, while Japan’s Nikkei 225 index /zigman2/quotes/210597971/delayed JP:NIK +0.91% declined 0.1%. The pan-European Stoxx 600 Europe index /zigman2/quotes/210599654/delayed XX:SXXP -0.12% fell 1.8%, while London’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.44% shed 1.2%.

Oil futures remained under pressure , with the U.S. crude benchmark settling at a three-week low on the New York Mercantile Exchange Gold ended slightly higher , with the December contract /zigman2/quotes/201432642/composite GOLD +0.18% eking out its fifth gain in sex sessions.

The ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY +0.05% , a measure of the currency against a basket of six major rivals, was up 0.3%.

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
29,872.47
-173.77 -0.58%
Volume: 324.19M
Nov. 25, 2020 5:33p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,629.65
-5.76 -0.16%
Volume: 2.32B
Nov. 25, 2020 5:33p
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
12,094.40
+57.62 +0.48%
Volume: 4.16M
Nov. 25, 2020 5:16p
loading...
/zigman2/quotes/205064656/composite
US : U.S.: Nasdaq
$ 275.59
-1.33 -0.48%
Volume: 12.47M
Nov. 25, 2020 4:00p
P/E Ratio
31.38
Dividend Yield
N/A
Market Cap
$784.96 billion
Rev. per Employee
$1.57M
loading...
/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 3,185.07
+67.01 +2.15%
Volume: 3.79M
Nov. 25, 2020 4:00p
P/E Ratio
93.28
Dividend Yield
N/A
Market Cap
$1598.11 billion
Rev. per Employee
$351,531
loading...
/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 116.03
+0.86 +0.75%
Volume: 76.50M
Nov. 25, 2020 4:00p
P/E Ratio
35.52
Dividend Yield
0.71%
Market Cap
$1972.72 billion
Rev. per Employee
$1.86M
loading...
/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 213.87
+0.01 +0.0047%
Volume: 21.01M
Nov. 25, 2020 4:00p
P/E Ratio
34.50
Dividend Yield
1.05%
Market Cap
$1616.96 billion
Rev. per Employee
$877,393
loading...
/zigman2/quotes/205453964/composite
US : U.S.: Nasdaq
$ 1,771.43
+2.55 +0.14%
Volume: 1.05M
Nov. 25, 2020 4:00p
P/E Ratio
35.37
Dividend Yield
N/A
Market Cap
$1195.71 billion
Rev. per Employee
$1.36M
loading...
/zigman2/quotes/202490156/composite
US : U.S.: Nasdaq
$ 1,764.13
+0.23 +0.01%
Volume: 979,957
Nov. 25, 2020 4:00p
P/E Ratio
35.23
Dividend Yield
N/A
Market Cap
$1195.71 billion
Rev. per Employee
$1.36M
loading...
/zigman2/quotes/206420077/composite
US : U.S.: NYSE Arca
$ 39.37
-0.94 -2.33%
Volume: 35.68M
Nov. 25, 2020 8:00p
loading...
/zigman2/quotes/208854639/composite
US : U.S.: NYSE
$ 80.08
-1.55 -1.90%
Volume: 5.11M
Nov. 25, 2020 7:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$17.96 billion
Rev. per Employee
$128,228
loading...
/zigman2/quotes/202325446/composite
US : U.S.: NYSE
$ 20.65
+0.42 +2.08%
Volume: 60.39M
Nov. 25, 2020 7:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$18.88 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
0.89
+0.0033 +0.37%
Volume: 0.00
Nov. 25, 2020 5:01p
loading...
/zigman2/quotes/210598127/delayed
CN : China: Shanghai
3,369.73
+7.41 +0.22%
Volume: 25.59B
Nov. 26, 2020 3:01p
loading...
/zigman2/quotes/210597971/delayed
JP : Nikkei
26,537.31
+240.45 +0.91%
Volume: 0.00
Nov. 26, 2020 3:15p
loading...
/zigman2/quotes/210599654/delayed
XX : STOXX
391.63
-0.46 -0.12%
Volume: 0.00
Nov. 26, 2020 5:50p
loading...
/zigman2/quotes/210598409/delayed
UK : FTSE UK
6,362.93
-28.16 -0.44%
Volume: 714,160
Nov. 26, 2020 4:59p
loading...
/zigman2/quotes/201432642/composite
US : U.S.: NYSE
$ 22.83
+0.04 +0.18%
Volume: 36.96M
Nov. 25, 2020 7:00p
P/E Ratio
13.41
Dividend Yield
1.36%
Market Cap
$40.72 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/210598269/delayed
US : U.S.: ICE Futures U.S.
92.04
+0.05 +0.05%
Volume: 0.00
Nov. 26, 2020 12:09p
loading...

This Story has 0 Comments
Be the first to comment
More News In
Investing

Story Conversation

Commenting FAQs »
Link to MarketWatch's Slice.