Wall Street sinks 3%, Dow at late July lows as pandemic surges

Young Journalists Club | Latest news of Iran and world

News ID: 49005
Publish Date: 9:24 - 29 October 2020
Thursday, 29 October 2020_US stocks tumbled on Wednesday, with the Dow closing at lows last seen in late July, as coronavirus cases soared globally and investors worried about the possibility of a contested US presidential election next week.

Wall Street sinks 3%, Dow at late July lows as pandemic surgesThe spiraling pandemic and Washington’s failure to reach a deal on new fiscal stimulus before the Nov. 3 election drove all three stock indexes to close more than 3% lower in heavy trade.

The sell-off accelerated during the session’s final minutes,with both the Dow and benchmark S&P 500 posting their biggest single-day declines since June 11.

Twelve US states set records for hospitalized COVID-19 patients, while Germany and France announced plans to shut large swathes of public life for a month as the pandemic surged across Europe.

“Obviously the virus is out of control. It’s spiking, it’s bad,” said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago. “The concept that ... it’s going to disappear is just a faulty assumption.”

Shares of hotels, airlines and other leisure-related companies sensitive to COVID-19-related turmoil sank, with the S&P 1500 airlines index .SPCOMAIR falling 4.3%. The energy index .SPNY slid 4.2% as oil prices tumbled on fears of a deeper drop in fuel demand. [O/R]

With just six days to the election, Wall Street's fear gauge .VIX spiked to its highest level since June 15. Concerns that a winner might not be declared the night of Nov. 3 also spurred the wide sell-off.

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

Investors are worried about various potential outcomes: that the election may be contested; a “blue wave” gives Biden a victory and his Democrats control of Congress; or that Trump gets re-elected, said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.

“As people run through the likely scenarios of what could happen with the election, there’s no short-term good answer,” he said.'

Losses were broad-based with technology stocks .SPLRCT, down 4.33%, weighing the most.

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