Dow Jones down 800 points amid rise in Covid-19 cases

Dow Jones down 800 points amid rise in coronavirus cases around the world

Losses were broad-based with technology stocks weighing the most

Representative image. Credit: Reuters Photo

The S&P 500 and the Dow hit their lowest levels since late-September on Wednesday as coronavirus cases surged globally and fears of a contested US presidential election next week added to worries.

Shares of hotels, airlines and other companies sensitive to Covid-19-related curbs fell with Wynn Resorts down 3.6% and the S&P 1500 airlines index declining 3.4%. The energy index fell as oil prices tumbled on fears of lower fuel demand.

New cases and hospitalizations set records in the US Midwest, while concerns rose over a national lockdown in France and tighter restrictions in Germany.

A spiralling pandemic and a failure to reach a deal on a fresh round of US fiscal stimulus before the Nov. 3 election have put the blue-chip Dow and the benchmark S&P 500 on track to erase their gains for October.

"Investors have pretty much figured we're not going to see any stimulus before the election and they're anticipating some additional shutdowns due to spikes in coronavirus cases," said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.

With just six days to the election, Wall Street's fear gauge spiked to its highest level since July 15, also on concerns that a winner might not be declared the night of Nov. 3 due to a delay in counting the huge volume of mail-in ballots.

Democratic challenger Biden leads President Donald Trump nationally by 10 percentage points, according to the Reuters/Ipsos poll, but the competition is tighter in swing states, which will decide the victor.

"Elections are also part of the investor's psyche, the uncertainty as to how long it will take to certify election," Keator said.

The Big Tech companies - Apple, Alphabet, Amazon and Facebook - which are due to report results on Thursday, fell between 3% and 4.7%, weighing the most on the S&P 500.

At 12:31 p.m. ET, the Dow Jones Industrial Average fell 734.41 points, or 2.67% to 26,728.78, the S&P 500 lost 89.95 points, or 2.65% to 3,300.90 and the lost 338.67 points, or 2.96% to 11,092.68.

Of the 206 S&P 500 companies that have reported third-quarter earnings so far, about 83% have topped expectations, according to Refinitiv data. Profit on average is expected to fall 14.8% from a year earlier.

Microsoft Corp's quarterly results surpassed analysts targets, benefiting from a pandemic-driven shift to working from home and online learning. Its shares, however, fell about 4% after rising nearly 35% so far this year.

General Electric Co was in a bright spot, jumping 9% after posting a surprise quarterly profit and a positive cash flow on the back of cost cuts and improvements in its power and renewable energy businesses.

Declining issues outnumbered advancers for a 14-to-1 ratio on the NYSE and for a 6.28-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and eight new lows, while the Nasdaq recorded 15 new highs and 122 new lows.

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