US stocks tumble on soaring Covid-19 cases and worries over lack of stimulus deal
US stocks tumbled on Monday, with the S&P 500 headed for its biggest daily decline in almost seven weeks, as soaring coronavirus cases and uncertainty about a fiscal relief bill in Washington dimmed the outlook for the US economic recovery.
The US, Russia and France set daily records for coronavirus infections. The number of Americans in hospital with Covid-19 rose to a two-month high.
Travel-related stocks, vulnerable to Covid-19-related curbs, dropped. The S&P 1500 airlines index fell 5.9% and cruise line operators Carnival and Royal Caribbean Cruises shed 8.8% and 11.2%, respectively.
Fears about Covid-19 resurgence and the continued failure to reach a fiscal policy package between Republicans and Democrats has investors unnerved
“Fears about Covid-19 resurgence and the continued failure to reach a fiscal policy package between Republicans and Democrats has investors unnerved,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
“Those are the two biggest drivers of today's decline.”
The energy index tracked a more than 3% fall in oil prices, falling 3.9%. The economically sensitive industrials and financials also posted steep declines among S&P sectors.
In talks on US fiscal relief from the pandemic, treasury secretary Steve Mnuchin said there were a number of areas in House of Representatives Speaker Nancy Pelosi's plan that President Donald Trump cannot accept.
Uncertainty is growing over the November 3 election. About 60-million Americans have voted in a record-breaking early turnout as Trump and Democratic challenger Joe Biden entered their final week of campaigning.
It is also one of the busiest weeks of the third-quarter earnings season that will see results from mega-cap US tech firms including Apple, Amazon, Google-parent Alphabet and Facebook.
The tech sector is among the only three sectors apart from health care and consumer staples expected to post an increase in profit from a year earlier.
Of the 139 companies in the S&P 500 that have reported earnings so far, 83.5% have beaten Wall Street expectations, according to Refinitiv data.
Ahead of the close the Dow Jones Industrial Average fell 779.76 points, or 2.75%, to 27,555.81. The S&P 500 lost 78.66 points, or 2.27%, to 3,386.73 and the Nasdaq Composite dropped 251.20 points, or 2.18%, to 11,297.08.
Software company Oracle fell 4.1% after German rival SAP abandoned medium-term profitability targets and warned of a longer-than-expected recovery time from the pandemic hit.
Hasbro tumbled 10% as quarterly adjusted revenue fell due to coronavirus-led delays in production of movies and TV shows.
Companies deemed stay-at-home winners including Amazon, Zoom Video Communications and video game companies Activision Blizzard and Take-Two Interactive Software rose between 0.4% and 1.4%.
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