Stocks on Monday ended sharply lower as coronavirus infections surged, stimulus negotiations remained stalemated and investors prepared for the presidential election just more than a week away.
Kicking off a week heavy with earnings from U.S. tech giants, the Dow Jones Industrial Average finished down 650 points, or 2.29%, to 27,685, the S&P 500 tumbled 1.86% and the Nasdaq slumped 1.64%.
The Dow industrials at one point were down 965 points, or 3.4%
Energy shares and stocks of industrial companies were the leading laggards Monday.
SAP (SAP) - Get SAP SE ADS Report American depositary receipts lost nearly a quarter of their market value declined after Europe's biggest tech company issued a profit and sales warning as it accelerated its shift toward cloud computing.
Stocks on Friday closed mostly higher but the S&P 500 fell 0.5% for the week, its first weekly loss in four. Negotiations between the White House and House Democrats on more economic aid for the struggling U.S. economy didn't make much headway. The Dow declined 1% for the week and the Nasdaq fell 1.1%.
House Speaker Nancy Pelosi said Sunday the House could pass a relief package this week but "that's up to [Senate Majority Leader Mitch McConnell] as to whether it would happen in the Senate and go to the president's desk, which is our hope and prayer."
Bloomberg reported that Pelosi and Treasury Secretary Steven Mnuchin will be holding a call on Monday to determine whether progress can be made on an aid package.
White House economic adviser Larry Kudlow told CNBC Monday that while stimulus talks continued, President Donald Trump can’t accept parts of the plan the Democrats have proposed.
Meanwhile, coronavirus infections in the U.S. hit a single-day record of 85,000 on Saturday. Deaths in the U.S. have passed 225,490, according to Johns Hopkins University.
The World Health Organization’s director general, Tedros Adhanom Ghebreyesus, said the northern hemisphere faces a “dangerous moment” as covid-19 cases have surged.
"The double whammy of a stalled stimulus bill and new highs in cases is a harsh reminder of the many worries that are still out there," said Ryan Detrick, chief market strategist for LPL Financial.
"Most of the recent economic data has been strong, but when you see parts of Europe going to back to rolling shutdowns, it reminds us this fight is still far from over."
Earnings reports are expected this week tech giants Apple (AAPL) - Get Apple Inc. Report, Amazon.com (AMZN) - Get Amazon.com Inc. Report, Microsoft, Alphabet (GOOGL) - Get Alphabet Inc. Report, Facebook (FB) - Get Meta Platforms Inc. Report and Advanced Micro Devices (AMD) - Get Advanced Micro Devices Inc. Report.
Data from Refinitiv said third-quarter earnings will fall 16.7% from a year earlier to a share-weighted total of $287.8 billion, before contracting by around 12.4% during the fourth quarter.
Of the 135 companies reporting so far this quarter, 83.7% have beaten Wall Street forecasts, well ahead of the typical pace of about 70%.
The stock jumped 16% to $103.10.