Dow ends 3.4% lower as COVID-19 worries rout US stocks

Dow ends 3.4% lower as COVID-19 worries rout US stocks

Financial Markets Wall Street
The New York Stock Exchange is seen, Wednesday, Oct 28, 2020, in New York. The Dow Jones Industrial Average dropped 943 points on Wednesday as surging coronavirus cases in the US and Europe threaten more business shutdowns and pain for the economy. (AP Photo/Mary Altaffer)

NEW YORK: Wall Street stocks plunged on Wednesday (Oct 28) on rising worries about coronavirus lockdowns as France and Germany announced tough new restrictions and US cases continued to climb.

The Dow Jones Industrial Average slumped 3.4 per cent, or more than 940 points, to 26,519.95.

The broad-based S&P 500 dropped 3.5 per cent to 3,271.03, while the tech-rich Nasdaq Composite Index dove 3.7 per cent to 11,004.87.

French President Emmanuel Macron announced that bars, restaurants and non-essential businesses will be forced to close for at least a month, a decision that came only hours after German Chancellor Angela Merkel announced similar measures in Europe's largest economy.

The moves are certain to weigh on Europe's economy and sharpen worries that the US could follow suit in the coming weeks if cases continue to mount.

An estimate of US third-quarter GDP set for release on Thursday is expected to show a historically big jump in activity compared to the second quarter, but investors are expecting much more uncertainty in the final quarter of the year.

"The strength of the economy over the summer has been vindicated," said FHN Financial's Chris Low. "But the strength of the fourth quarter is very much up in the air."

Low said investors have been disappointed with Congress's failure to enact additional stimulus. He also said investors are increasingly worried fiscal support could face obstacles after the Nov 3 election if the vote again results in a government split between Democrats and Republicans.

While losses were broad-based, Facebook, Twitter and Google parent Alphabet all fell sharply amid a contentious Senate hearing in which Republicans accused the companies of suppressing conservative content.

Among companies reporting results, Boeing slid 4.6 per cent as it reported another quarterly loss and announced another additional job cuts. The company will eliminate another 7,000 positions, taking the two-year total to 30,000.

Source: AFP/kv