USA stock sell-off: Dow tumbles 940 points on rising infections

Daniel Fowler
October 29, 2020

The S&P 500 fell 10.29 points, or 0.3%, to 3,390.68. The benchmark index is already down 5.6% this week, on track for its biggest weekly decline since March. That's when the market was in the midst of selling off as strict lockdowns around the world choked the economy into recession.

The Dow Jones Industrial Average sunk about 700 points in early trading on Wednesday morning, mirroring drops in European markets. Eastern time, and the Nasdaq composite slumped 3.1 percent.

US stocks sold off for a third consecutive day on Wednesday, as surging coronavirus cases gave rise to new lockdowns in the USA and Europe. The declines followed a broad sell-off for stocks indexes in Europe, where the governments in France and Germany imposed new restrictions aimed at slowing the spread of the virus.

Analysts expect the tech sector to post a 0.4% increase in third-quarter earnings from a year earlier, while overall S&P 500 profit is forecast to fall 16.2%, according to Refinitiv data.

The Dow lost 943.24 points, or 3.4%, to 26,519.95. The FTSE 100 in London fell 2.6 percent. Stocks also weakened across much of Europe and Asia. Even if the most restrictive lockdowns don't return, investors worry that the worsening pandemic could scare away customers of businesses and sap profits.

Stocks ended sharply lower on Wall Street today, deepening last week's losses. Shares of Delta Air Lines fell 2.5% in pre-market trading. Energy stocks also dropped in tandem with crude oil prices. Benchmark U.S. crude dropped 6.2 percent to $37.09 per barrel. Brent crude, the global standard, fell 5.4% to $39.12 per barrel.

Investors headed into the safety of USA government bonds.

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Against a basket of currencies, the dollar edged up 0.1 percent. It was as high as 0.87% last week.

On Monday, the three major USA stock indexes posted their biggest declines in about four weeks on a record number of new coronavirus cases in the United States and some European countries, and as the elusive stimulus rattled investors. The worst performing sectors were Information Technology, which fell 4.33 percent and is up 40 percent this year, and Communication Services, which includes many digital media companies and is up 17.81 percent for the year and fell 4 percent Wednesday.

Even the continued parade of better-than-expected reports on corporate profits for the summer failed to shift the momentum.

Microsoft, the second-biggest company in the S&P 500, slumped 5% even after reporting stronger profit and revenue for its latest quarter than expected.

Companies broadly have not been getting as big a pop in their stock prices as they typically do after reporting healthier-than-expected profits.

"Whether you call it a continuation of the pandemic or a third wave of new case discovery - it is the largest concern", said Art Hogan, chief market strategist at National Securities in NY.

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