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S&P 500 tumbles in worst rout in almost two months

[NEW YORK] Stocks tumbled in the US and Europe as rising coronavirus infections and tougher lockdowns added to worries about the economic hit from the pandemic.

The S&P 500 Index fell almost 3 per cent, headed for the biggest drop since early September, amid a surge in Covid-19 hospitalisations, especially in the Midwest. Energy shares sank as oil prices declined, and technology stocks were also among the worst performers.

Boeing slumped to a one-month low as it announced plans for more job cuts. Microsoft declined as investors focused on a forecast that fell short of analysts' highest projections, looking past a decisively upbeat profit and sales report. General Electric gained after reporting a surprise profit.

Markets in the US and Europe have retreated sharply this week as virus cases surge and American lawmakers fail to agree on an economic aid package before the Nov 3 election. Analysts are also warning about increased volatility in markets ahead of the presidential vote and in its aftermath, with some saying that a contested outcome is still a possibility.

"With rising Covid cases, markets are afraid policy makers will react with another harsh lockdown," said Bill Callahan, an investment strategist at Schroders. "These stocks that really depend on people going back to their daily habits are really being impacted right now."

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