Stocks slump on surging infections
Dow falls 650 points; S&P suffers biggest drop in a month
U.S. stocks fell sharply Monday, deepening last week’s losses, as a troubling increase in coronavirus counts put investors in a selling mood.
The skid came as doubts mount on Wall Street that Washington will come through with more stimulus for the economy before Election Day.
The S&P 500 slid 1.9%, its biggest single-day decline in more than a month. The Dow Jones Industrial Average dropped 650 points after having been down more than 960 during the heaviest selling. Technology companies drove much of the broad sell-off, though losses in communications services, financial and industrial stocks helped weigh down the market. Energy stocks also dropped in tandem with crude oil prices.
Stocks also fell across much of Europe and Asia. In another sign of caution, Treasury yields pulled back after touching their highest level since June last week.
“It’s kind of a perfect storm,” said Ross Mayfield, investment strategy analyst at Baird. “The record case numbers and the kind of rolling lockdowns across Europe are getting the headlines. Oil is down on some supply and demand issues. Stimulus seems more and more unlikely by the day, at least preelection.”
The S&P 500 fell 64.42 points to 3,400.97. The Dow slumped 650.19 points, or 2.3%, to 27,685.38. The Nasdaq composite lost 189.34 points, or 1.6%, to 11,358.94. Smaller company stocks also took heavy losses, knocking the Russell 2000 index down 35.29 points, or 2.2%, to 1,605.21.
Coronavirus counts are spiking in much of the United States and Europe, raising concerns about more damage to the still-weakened economy. The U.S. came close to setting back-to-back record daily infection rates Friday and Saturday. In Europe, Spain’s government declared a national state of emergency Sunday that includes an overnight curfew, while Italy ordered restaurants and bars to close each day by 6 p.m. and shut down gyms, pools and movie theaters.
Hopes are fading, meanwhile, that Washington will be able to provide more support for the economy anytime soon. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin weren’t able to reach an agreement in a phone call Monday, according to a Pelosi aide. The two have been discussing a potential deal to send cash to most Americans, restart supplemental benefits for laid-off workers and provide aid to schools, among other things.
Deep partisan difference remains on Capitol Hill, and time is running out for anything to happen before Election Day on Nov. 3. Any compromise reached between House Democrats and the White House would also likely face stiff resistance from Republicans in control of the Senate. Another concern is that possible delays in sorting out the results of the elections could push a stimulus deal back indefinitely.
Stocks of companies that need the economy to return to normal logged some of the sharpest losses Monday. Norwegian Cruise Line Holdings fell 8.4%, while Marathon Oil and United Airlines each lost 7%.
Among the market’s few gainers was Zoom Video Communications, which gained 1.2%.