Monday October 18th, 2021 12:57PM

Stocks have their worst day in a month as virus cases surge

By The Associated Press
Related Articles
  Contact Editor

U.S. stocks fell sharply Monday 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 logged 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 told, about 92% of the stocks in the S&P 500 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.


AP Business Writer Yuri Kageyama contributed.

  • Associated Categories: Local/State News, Associated Press (AP), AP National News, AP Online National News, Top General short headlines, AP Elections, General Election News, AP Business, AP Business - Corporate News, AP Business - Economy, AP Business - Financial Markets, AP Business - Industries, AP Business - Utilities
© Copyright 2021
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Stocks have their worst day in a month as virus cases surge
The stock market had its worst day in a month as virus cases surge and help for the economy from Washington remains nowhere in sight
4:08PM ( 10 minutes ago )
Moon holds more water in more places than ever thought
Scientists say the moon's shadowed, frigid nooks and crannies may hold frozen water in more places and in larger quantities than previously suspected
4:05PM ( 12 minutes ago )
Coronavirus deaths are rising again in the US, as feared
Deaths per day from the coronavirus in the U_S_ are on the rise again, just as health experts had feared, and cases are climbing in nearly every state, despite assurances from President Donald Trump over the weekend that “we’re rounding the turn, we’re doing great.”
4:02PM ( 15 minutes ago )
Associated Press (AP)
Surgery successful for GOP US Senate candidate Jason Lewis
The campaign of Republican U.S. Senate candidate Jason Lewis of Minnesota says his emergency surgery for a severe internal hernia was a success
2:59PM ( 1 hour ago )
The Latest: Trump says great winter ahead, not 'dark winter'
President Donald Trump is downplaying his opponent’s concerns about the surge in coronavirus cases as he campaigns in Pennsylvania
2:56PM ( 1 hour ago )
Paris train attack hero makes bid for Congress from Oregon
In 2015, Alek Skarlatos and two friends thwarted an attack by a gunman on a Paris-bound train, a dramatic and heroic action that was made into a movie by Clint Eastwood in which the trio starred as themselves
2:47PM ( 1 hour ago )
AP Elections
The Latest: Kushner says Black people must 'want' to succeed
President Donald Trump’s son-in-law and senior adviser Jared Kushner says the president wants to help Black people succeed but that they have to want to be successful for the policies to work
12:11PM ( 4 hours ago )
Tom Cotton is campaigning hard, just not for re-election
Republican Sen. Tom Cotton is on the ballot again six year after being elected in a heated race, but this time his campaign's focus isn't on Arkansas
12:00PM ( 4 hours ago )
The Latest: First lady hits campaign trail for Trump
Melania Trump is set to make her first solo campaign-trail appearance of 2020 for President Donald Trump
11:36AM ( 4 hours ago )
General Election News
Fed up: California restaurants seek booze, health fee refund
California restaurants want state and county officials to refund more than $100 million in fees for liquor and health permits and tourism assessments that they say were charged while their businesses were shut down or partially closed because of coronavirus rules
2:49PM ( 1 hour ago )
60,000 in Southern California to evacuate after blaze grows
A fast-moving wildfire has forced evacuations for 60,000 people in Southern California as powerful winds across the state prompted power to be cut to hundreds of thousands to prevent utility equipment from sparking new blazes
2:41PM ( 1 hour ago )
Muslims call for French goods boycott to protest caricatures
Muslims in the Middle East and beyond are calling for boycotts of French products and for protests as a clash over depictions of the Prophet Muhammad and the limits of free speech intensifies
2:30PM ( 1 hour ago )
AP Business
Wall Street slumps again as coronavirus counts keep climbing
Stocks are falling in early trading on Wall Street Monday and deepening last week’s losses
10:56AM ( 5 hours ago )
Chinese fintech could shatter records with $35B share offer
The world’s largest fintech company, China's Ant Group, will try to raise nearly $35 billion in a public offering of stock that would be the biggest ever
10:26AM ( 5 hours ago )
Ant Group could raise nearly $35B in record share offering
China’s Ant Group will try to raise nearly $35 billion in its initial public offering in Shanghai and Hong Kong, which would make it the largest share offering in history
8:53AM ( 7 hours ago )
AP Business - Corporate News
Sept. new home sales fall 3.5%, after strong summer season
Sales of new homes fell by 3.5% in September to a seasonally-adjusted annual rate of 959,000 million units, the Commerce Department said Monday, as the housing market’s summer buying season came to a close
10:50AM ( 5 hours ago )
Low expections in Mexico as US election approaches
A week before United States elections, expectations in Mexico are low
10:24AM ( 5 hours ago )
US stocks open lower as virus cases spread, aid talks stall
Stocks are opening broadly lower on Wall Street as investors pull back over concerns that economic shutdowns will accelerate with the increasing spread of coronavirus cases in the U.S. and Europe
9:41AM ( 6 hours ago )
AP Business - Economy
Four years in, Trump has plenty of unfinished business
President Donald Trump swept into office nearly four years ago as an outsider who promised to get things done on behalf of the American people through force of will and unrivaled knowledge about the art of the deal
8:41AM ( 2 days ago )
US stocks shake off a wobbly start and end mostly higher
Stocks shrugged off a sluggish start and ended mostly higher on Wall Street Friday
4:59PM ( 2 days ago )
Stocks are mixed on Wall Street as more earnings come in
Stocks are trading mixed on Wall Street, following gains in European markets, as more U.S. companies report results for the summer earnings period
2:19PM ( 3 days ago )
AP Business - Financial Markets
Big power shutoffs in California as winds boost fire danger
Large swaths of California were had no electricity on Monday as utilities sought to prevent the chance of their equipment sparking wildfires as the fire-weary state is buffeted by powerful winds and dangerously dry weather conditions
10:27AM ( 5 hours ago )
7 held for suspected tanker hijack after UK commando raid
Police say seven stowaways seized when British naval special forces stormed an oil tanker in the English Channel have been arrested on suspicion of hijacking
10:15AM ( 6 hours ago )
Power shut off in California as winds, fire danger increase
Large swaths of California were without power Monday as utilities sought to prevent the chance of their equipment sparking wildfires while the fire-weary state was buffeted by powerful winds and dangerously dry weather conditions
9:00AM ( 7 hours ago )
AP Business - Industries
Utility cuts power to 26,500 Californians over wildfire risk
Pacific Gas & Electric started cutting power Sunday to tens of thousands of California residents and planned outages for many more to prevent the chance of sparking wildfires due to extreme fire weather
4:35PM ( 23 hours ago )
UK military seizes oil tanker with stowaway troubles
The U.K. military has seized control of an oil tanker that laid anchor off in the English Channel after reporting it had seven stowaways on board who had become violent
4:21PM ( 23 hours ago )
British police respond to oil tanker with stowaway trouble
British police and coast guard units have responded to an incident on an oil tanker in the English Channel after the crew reported they had stowaways onboard who had become verbally abusive
3:51PM ( 1 day ago )
AP Business - Utilities
Moon holds more water in more places than ever thought
Scientists say the moon's shadowed, frigid nooks and crannies may hold frozen water in more places and in larger quantities than previously suspected
4:05PM ( 13 minutes ago )
Coronavirus deaths are rising again in the US, as feared
Deaths per day from the coronavirus in the U_S_ are on the rise again, just as health experts had feared, and cases are climbing in nearly every state, despite assurances from President Donald Trump over the weekend that “we’re rounding the turn, we’re doing great.”
4:02PM ( 16 minutes ago )
Strikers in Belarus press for authoritarian leader's ouster
Factory workers, students and owners of small businesses in Belarus began a strike to demand that authoritarian President Alexander Lukashenko resign after more than two months of protests following a disputed election
3:45PM ( 34 minutes ago )
French doctor warns his country has 'lost control' of virus
A French doctor warns that his country has “lost control of the epidemic,” a day after health authorities reported more than 52,000 new coronavirus infections
3:42PM ( 36 minutes ago )
Zeta becomes a hurricane as it nears Yucatan, heading for US
Zeta strengthened to a hurricane as it heads toward Mexico's Yucatan Peninsula resorts and then likely move on for a landfall on the central U.S. Gulf Coast at midweek
3:24PM ( 55 minutes ago )