Stocks Tumble As Coronavirus Cases Spike Again In U.S. And Europe
Investors are also discouraged by the lack of progress in talks between Congress and the White House over another coronavirus relief bill.
Updated at 2:40 p.m. ET
Stocks on Monday were heading for their worst day since early September amid a surge in coronavirus cases in the United States and Europe and declining optimism about another U.S. pandemic relief bill.
By early afternoon, the Dow Jones Industrial Average was down more than 800 points, a decline of nearly 3%, and had lost ground for the month of October. The other major indexes were also down, though not as much.
The declines happened amid reports that coronavirus cases have spiked in the United States, with more than 80,000 new infections reported on Friday and Saturday, while France and Italy registered a record number of new cases.
"Coronavirus worries are back," said Lindsey Bell, chief investment strategist at Ally Invest. In addition to new cases reaching records, she said, "the timing of a vaccine continues to be crucial, but elusive, adding to concerns about economic prospects."
Companies slammed by the pandemic, such as airlines and travel companies, were among those hardest-hit, with United Airlines down more than 7% in afternoon trading.
"There continue to be wide swaths of the U.S. economy which simply cannot get back to normal in a worsening pandemic, including travel, leisure, entertainment, restaurants and bricks-and-mortar retailing," said David Kelly, chief global strategist at J.P. Morgan Funds.
But declines took place across the board. Energy companies, which see their profits fall when the economy slows, were down.
Meanwhile, the odds that Congress and the White House can agree on another stimulus bill are fading.
While House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin spoke several times about a bill last week, White House officials say significant differences remain between the two sides.
"The failure of Congress and the administration to agree on a further stimulus package before the election will likely result in more small-business closures and state and local layoffs in the fourth quarter, along with some slowing in consumer spending on the basics," Kelly said.
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