Tech slide hits Wall Street as coronavirus cases spiral

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(Reuters) – Major Wall Street indices fell on Friday, dragged down by a drop in tech heavyweight stocks in the wake of their quarterly results, with a record rise in coronavirus cases and nerves during the presidential election adding to a pessimistic mood.

The New York Stock Exchange is pictured in the Manhattan neighborhood of New York, New York, United States, October 28, 2020. REUTERS / Carlo Allegri

All three major clues were on track for their worst week since March on the prospects of broader COVID-19 restrictions in Europe, while the surge in cases in the United States has pushed hospitals to the edge of capacity.

The CBOE volatility index held steady at a 20-week high before the last weekend before election day Tuesday.

“We’re two days away from Election Day and people want to make sure they’re not completely caught off guard,” said Pete Santoro, Boston-based equity portfolio manager at Columbia Threadneedle.

Apple Inc fell about 5.5% after posting the biggest decline in quarterly iPhone sales in two years due to the late launch of new 5G phones.

Amazon.com Inc fell 4.7% after forecasting higher costs related to COVID-19, while Facebook Inc lost 5.7% on warning of a more difficult 2021.

The tech and consumer discretionary sectors posted the largest percentage declines.

Communications services were boosted by a 4.4% rise in Alphabet Inc shares after Google’s parent beat quarterly sales estimates as companies resumed advertising.

“There is a big sale at these big names in tech because they haven’t lived up to the hype and people are really worried about next week’s election,” said Kim Forrest, director. investments at Bokeh Capital Partners in Pittsburgh.

President Donald Trump has always followed Democratic challenger Biden in national polls for months, but polls in more competitive states have shown a tighter race.

At 12:32 p.m. ET, the Dow Jones Industrial Average fell 239.82 points, or 0.90% to 26,419.29, the S&P 500 lost 41.73 points, or 1.26% to 3,268.38, and the Nasdaq Composite lost 237.30 points or 2.12% to 10,948.30.

The third-quarter earnings season has passed its half, with about 86.2% of S&P 500 companies beating earnings estimates, according to data from Refinitiv. Overall, profit is expected to fall 10.3% from the previous year.

Twitter Inc fell about 20% after the microblogging site added fewer users than expected and warned the U.S. election could impact ad revenue.

AbbVie Inc gained 4.3% after the drugmaker raised its full-year profit forecast, supported by signs of resuming demand for its Botox injection.

Falling issues outnumbered those that rose on the NYSE by a 2.3-to-1 ratio, while on the Nasdaq, a 0.4-to-1 ratio aided the declines.

The S&P 500 posted three new 52-week highs and a new low, while the Nasdaq Composite recorded 16 new highs and 76 new lows.

Report by Medha Singh and Shivani Kumaresan in Bengaluru; Additional reporting by Susan Mathew; Editing by Arun Koyyur, Anil D’Silva and Shounak Dasgupta

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