US: Stocks fall again on virus, fading stimulus odds

[NEW YORK] Wall Street stocks dropped for a third straight session on Monday as worries about the latest coronavirus surge and the diminishing odds of another US stimulus bill weighed on equities.

The Dow Jones Industrial Average ended at 27,147.70, down 1.8 per cent or around 510 points, but more than 400 points above session lows.

The broad-based S&P 500 fell 1.2 per cent to 3,281.06, while the tech-rich Nasdaq Composite Index edged down 0.1 per cent to 10,778.80.

Stocks were in the red all day, but recovered somewhat the afternoon in apparent bargain-hunting.

A surge of Covid-19 cases in France, Britain and other countries has revived talk of new restrictions in the region, weighing on investor sentiment.

Adding to that unease, hopes of another round of US stimulus spending took another hit with the death of US Supreme Court Justice Ruth Bader Ginsburg, which has sharpened already significant partisan differences in Washington ahead of the US presidential election November 3.

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Ginsburg's death "means the political scene now seems more hostile, decreasing the possibility of a stimulus deal getting done," said TD Ameritrade's JJ Kinahan in a note.

There were also indications that a spending bill to avert a government shutdown at the end of the fiscal year on September 30 could become problematic in Washington.

Major banks fell following an investigation by Buzzfeed News and the International Consortium of Investigative Journalists on the flow of money tied to drug wars and other illicit activity through the financial system. Bank of America, Citigroup and JPMorgan Chase all shed at least two per cent.

Electric truck company Nikola plunged nearly 20 per cent after the surprise departure of founder Trevor Milton in the wake of fraud allegations.

But Microsoft jumped 1.1 per cent after announcing it will acquire ZeniMax Media for US$7.5 billion, adding muscle to its Xbox arm ahead of a fierce battle in the market for new gaming consoles.

AFP