Printable Page Headline News   Return to Menu - Page 1 2 3 5 6 7 8 13
 
 
Stocks Have Worst Day in a Month       10/26 16:04

   U.S. stocks fell sharply Monday, deepening last week's losses, as a 
troubling increase in coronavirus counts put investors in a selling mood. 

   (AP) -- 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 
pre-election."

   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 
very close to setting back-to-back record daily infection rates on Friday and 
Saturday. In Europe, Spain's government declared a national state of emergency 
on 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 next week's elections could end 
up pushing a stimulus deal back indefinitely.

   Worries about the diminishing prospect for more stimulus in the short term 
helped drive the S&P 500 to a 0.5% drop last week, its first weekly loss in the 
last four.

   "While we are seeing nations attempt to stifle the spread of the virus 
through more localised and tentative restrictions, it seems highly likely that 
we will eventually see a swathe of nationwide lockdowns if the trajectory 
cannot be reversed," said Joshua Mahony, senior market analyst at IG in London.

   The U.S. economy has recovered a bit since the stay-at-home restrictions 
that swept the country early this year eased, and economists expect a report on 
Thursday to show it grew at an annual rate of 30.2% during the summer quarter 
after shrinking 31.4% during the second quarter.

   But momentum has slowed recently after a prior round of supplemental 
unemployment benefits and other stimulus that Congress approved earlier this 
year expired.

   Stocks of companies that need the virus to abate and the economy to return 
to normal logging some of the sharpest losses Monday.

   Norwegian Cruise Line Holdings fell 8.4%, Marathon Oil dropped 7% and United 
Airlines lost 7%.

   Energy stocks dropped to the largest loss among the 11 sectors that make up 
the S&P 500, falling in concert with oil prices. All the stocks in the index 
closed lower.

   Among the market's few gainers were companies that can succeed even in a 
stay-at-home economy. Zoom Video Communications gained 1.2%.

   Amazon fared much better than the broader market, recovering from an early 
loss to close 0.1% higher, while Apple lost an early gain and ended flat. 
Expectations are high for them, and analysts say they'll report strong results 
for their latest quarter this week. They and other Big Tech stocks have soared 
through the pandemic on hopes their growth will only continue as work-from-home 
and other trends that benefit them accelerate.

   This upcoming week is the busiest of this quarter's earnings season, with 
more than a third of the companies in the S&P 500 index scheduled to report. 
Besides Amazon and Apple, Ford Motor, General Electric and Google's parent 
company, Alphabet, are also on the docket.

   Across the S&P 500, profit reports for the summer have been mostly better 
than Wall Street had feared, though they're still on pace to be more than 16% 
lower than year-ago levels. Through Friday, 84% of S&P 500 companies reported 
better results than analysts had forecast, according to FactSet. If that level 
holds, it would be the best since at least 2008, when FactSet's records begin.

   Meanwhile, the upcoming U.S. elections could mean more short-term 
uncertainty in the markets and the results could determine the size and timing 
of any aid from Congress, said Esty Dwek, head of global market strategy at 
Natixis Investment Managers.

   "It's going to be a little bit volatile in the next week depending on the 
results, but we're not expecting weeks of uncertainty," she said.

   European and Asian markets closed lower. The yield on the 10-year Treasury 
fell to 0.80% from 0.85% late Friday.

 
Copyright DTN. All rights reserved. Disclaimer.
Powered By DTN