Tech slide hits Wall Street as coronavirus cases spiral
Reuters
Published Oct 30, 2020 06:51AM ET
Updated Oct 30, 2020 01:10PM ET
By Medha Singh and Shivani Kumaresan
(Reuters) - Wall Street's major indexes tumbled on Friday, dragged down by a slide in shares of tech heavyweights following their quarterly results, with a record rise in coronavirus cases and nerves over the presidential election adding to a downbeat mood.
The three main indexes were on course for their worst week since March on prospects of wider COVID-19 restrictions in Europe, while surging cases in the United States pushed hospitals to the brink of capacity.
The CBOE volatility index held at a 20-week high ahead of the final weekend before Election Day on Tuesday.
"We're two market days away from Election Day and people want to make sure that they're not completely caught off guard," said Pete Santoro, a Boston-based equity portfolio manager at Columbia Threadneedle.
Apple Inc (NASDAQ:AAPL) tumbled about 5.5% after it posted the steepest drop in quarterly iPhone sales in two years due to the late launch of new 5G phones.
Amazon.com Inc (NASDAQ:AMZN) fell 4.7% after it forecast a jump in costs related to COVID-19, while Facebook Inc (NASDAQ:FB) shed 5.7% as it warned of a tougher 2021.
Tech and consumer discretionary sectors posted the steepest percentage declines.
Communication services got a boost from a 4.4% jump in shares of Alphabet (NASDAQ:GOOGL) Inc after the Google parent beat estimates for quarterly sales as businesses resumed advertising.
"There is a big selloff in those big tech names because they didn't live up to the hype and people are really worried about next week's election," said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.
President Donald Trump has consistently trailed Democratic challenger Biden in national polls for months, but polls in the most competitive states have shown a closer 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 is past its halfway mark, with about 86.2% of S&P 500 companies topping earnings estimates, according to Refinitiv data. Overall, profit is expected to fall 10.3% from a year earlier.
Twitter Inc (NYSE:TWTR) slumped about 20% after the micro-blogging site added fewer users than expected and warned the U.S. election could impact ad revenue.
AbbVie Inc (NYSE:ABBV) gained 4.3% after the drugmaker raised its full-year profit forecast, bolstered by signs of recovery in demand for its Botox injection.
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Declining issues outnumbered advancing ones on the NYSE by a 2.3-to-1 ratio, while on Nasdaq, a 0.4-to-1 ratio favored decliners.
The S&P 500 posted three new 52-week highs and one new low, whereas the Nasdaq Composite recorded 16 new highs and 76 new lows.
Written By: Reuters
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