World

Dow falls 900 points as average daily coronavirus cases hit record high

Stocks fell sharply on Monday as coronavirus infections jumped and negotiations for a fiscal stimulus package before the election came down to the wire.

The Dow Jones Industrial Average traded 900 points lower, or 3.2%, and was headed for its biggest one-day loss since June 11. The S&P 500 slid 2.7% and the Nasdaq Composite dipped 2.5%. Monday’s decline erased the monthly gains for the Dow industrials.

The decline came amid a record surge in new coronavirus cases in the U.S. The country saw more than 83,000 new infections on both Friday and Saturday after outbreaks in Sun Belt states, surpassing a previous record of roughly 77,300 cases set in July, according to data from Johns Hopkins University. The data also showed the country has reported an average of 68,767 cases per day over the past seven days, a record.

White House chief of staff Mark Meadows said Sunday that the U.S. will not get control of the pandemic amid the surge in new cases.

“To me, this is Phase 2 of the pandemic,” said Frank Rybinski, chief macro strategist at Aegon Asset Management. “Until we get some eradication of the virus, it’s going to be like a gray cloud” over the market. Rybinski added his firm has been “reducing risk” from its portfolios in recent months.

Optimism also dimmed that the White House and Republicans could strike a stimulus deal with Democrats before the election. Meadows and House Speaker Nancy Pelosi in separate interviews accused each other of moving the goalposts on stimulus talks. White House economic advisor Larry Kudlow also told CNBC’s “Squawk Box” that talks had slowed down, but noted they are still ongoing.

“The market is likely to drift lower near term (first SPX support at 3,209) in the face of Stimulus disappointment … virus resurgence, and intensifying election uncertainty,” said Julian Emanuel, strategist at BTIG.

Stocks with the most to lose from rising cases and a stalled stimulus plan led the decline Monday. Royal Caribbean shares fell 10.1%. Delta fell 5.4%.

SAP, one of the biggest software companies in Europe, saw its shares plunge more than 20% after warning that businesses are holding back from spending; it also cut its earnings and revenue estimates for 2020. Oracle and Microsoft followed SAP lower, sliding 4.4% and 2.4%, respectively.

This week marks the last week of October and the final trading period before Nov. 3. Major averages are on track for modest gains for the month, with the S&P 500 and the Nasdaq both rising more than 3% so far. The 30-stock Dow is up about 2% this month.

“Based on the action in the stock market we’ve seen over the past two weeks, it seems to us that it will take some serious new-news to fuel a significant decline over the next week and a half,” Matt Maley, chief market strategist at Miller Tabak, said in a note on Sunday.

Former Vice President Joe Biden maintains a sizable lead over President Donald Trump in national polls, although the gap has narrowed slightly as of late.

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

Let’s block ads! (Why?)

International: Top News And Analysis

Leave a Reply

Your email address will not be published. Required fields are marked *