Dow closes more than 150 points lower as Wall Street posts its worst one-week sell-off since March

Dow closes more than 150 points lower as Wall Street posts its worst one-week sell-off since March

106771182 1604093815531 a9 img 10 57 221 697655 1000 1604093501125
Stocks fell on Friday, led by major tech shares, as Wall Street wrapped up a difficult week in which coronavirus cases rose, U.S. fiscal stimulus talks broke down and traders braced for next week’s presidential election.

The Dow Jones Industrial Average closed 157.51 points lower, or 0.6%, at 26,501.60. At one point, the Dow was down more than 500 points. The S&P 500 dropped 1.2% to 3,269.96 and the Nasdaq Composite pulled back 2.5% to 10,911.59.

The Dow and S&P 500 fell 6.5% and 5.6%, respectively, and posted their biggest weekly losses since March. The Nasdaq lost more than 5% over that time period and also had its worst one-week performance since March.

Those weekly losses came as the seven-day average of new coronavirus cases in the U.S. hit an all-time high this week, according to data from Johns Hopkins University. In Europe, Germany and France announced new lockdown measures to curb the virus’ spread.

“Massive policy stimulus, positive medical developments and high hopes for a return to pre-pandemic economic activity levels have provided a solid boost to equity markets,” strategists at MRB Partners wrote in a note. “However, mounting new economic restrictions, particularly in Europe, despite being forecastable and in lagged response to the re-acceleration in COVID-19 infections, only caught investors’ attention this week, triggering sharp losses.”

In Washington, Senate Majority Leader Mitch McConnell adjourned the Senate until Nov. 9, making it highly unlikely for Democrats and Republicans to reach a deal on new fiscal stimulus before the election on Tuesday. Treasury Secretary Steven Mnuchin, meanwhile, accused House Speaker Nancy Pelosi of miscasting the state of the stalled negotiations, calling it a “political stunt.”

Traders had been betting on both sides reaching a stimulus deal before Tuesday’s vote as some recent data shows the economic recovery could stall without new aid. This is all taking place as traders prepare for choppy market moves next week amid the U.S. presidential election.

Data compiled by RealClearPolitics showed former Vice President Joe Biden holding an average lead of more than 7 percentage points over President Donald Trump. However, that lead has narrowed since early October.

Gina Bolvin Bernarduci, president of Bolvin Wealth Management, said several of her clients were concerned about the election outcome and how it would impact their investments.

“We have had more calls about the election recently than we had during the big sell-off in March,” said Bernarduci. “I think it’s going to be a few volatile days, but there are factors that affect the market more than who wins the election.”

“Investors should also keep in mind what happened four years ago. Everybody thought that if Trump won, that would have been bad for the market, yet we made [more than 100 new highs] in four years,” Bernarduci said.

The Dow, S&P 500 and Nasdaq all posted their first back-to-back monthly losses since March. The Dow lost more than 6% this month while the S&P 500 and Nasdaq each declined by more than 5% in October.

Apple and Amazon fall on earnings, Alphabet gains

Credit: CNBC

Leave A Comment

Your email address will not be published. Required fields are marked *