Wall Street slumps as rise in coronavirus cases dims economic outlook

The Dow Jones Industrial Average fell 361.05 points, or 1.31%, at the open to 27,102.14.

 Wall Street main indexes slumped on Wednesday as a surge in coronavirus cases in the United States and Europe dashed hopes of a quick global economic recovery.

Shares of hotels, airlines and other companies sensitive to Covid-19-related curbs dropped with Wynn Resorts down 2 per cent and the S&P 1500 airlines index declining 3 per cent. The energy index  lost about 3 per cent as oil prices fell on fears of lower fuel demand.

New cases and hospitalizations set records in the U.S. Midwest, while concerns over a national lockdown in France and tighter restrictions in Germany sapped investor appetite for risk. 

“Whether you call it a continuation of the pandemic or a third wave of new case discovery - it is the largest concern,” said Art Hogan, chief market strategist at National Securities in New York.

“Unless and until we get through this pandemic, it is hard for investors to imagine a better economic time.”

A spiraling pandemic and a failure to reach a deal on a fresh round of U.S. fiscal stimulus before Nov. 3 elections have wiped off all of blue-chip Dow’s gains for October and pushed the benchmark S&P 500 to near four-week low

Wall Street's fear gauge jumped to its highest level in nearly two-months, also on concerns over a delay in counting the huge volume of mail-in ballots, meaning a winner might not be declared the night of Nov. 3, when polls close.

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

“The uncertainty of not knowing the direction we are heading is making investors step on the sidelines and wait for the election results,” Hogan said.

Losses were broad-based with technology stocks weighing the most. At 9:47 a.m. ET, the Dow Jones Industrial Average .DJI was down 442.69 points, or 1.61 per cent, at 27,020.50 and the S&P 500 was down 57.05 points, or 1.68 per cent, at 3,333.63. The Nasdaq Composite was down 224.75 points, or 1.97 per cent, at 11,206.60.

Of the 170 S&P 500 companies that have reported third-quarter earnings so far, about 84 per cent have topped expectations, according to Refinitiv data. Profit on average is expected to fall 16.4 per cent from a year earlier

Microsoft Corp's MSFT.O quarterly results surpassed analysts targets, benefiting from a pandemic-driven shift to working from home and online learning. Its shares, however, fell 2.6 per cent after rising 35 per cent so far this year.

The other Big Tech companies - Apple, Alphabet, Amazon and Facebook - which are due to report results on Thursday, fell between 2.7 per cent and 3.7 per cent.

General Electric Co jumped 8.6 per cent after it reported a surprise quarterly profit and a positive cash flow on the back of cost cuts and improvements in its power and renewable energy businesses.

Boeing slipped 1.9 per cent as it reported its fourth straight quarterly loss.

Declining issues outnumbered advancers for a 10.03-to-1 ratio on the NYSE and for a 6.28-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week highs and seven new lows, while the Nasdaq recorded seven new highs and 66 new lows.