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Wall Street slides after Donald Trump tests positive for Covid-19

All 11 major S&P sectors were down, with energy sliding 1.5% on the back of a more than 3% drop in oil prices

Topics
Wall Street | Donald Trump

Sagarika Jaisinghani & Devik Jain | Reuters 

Donald Trump
US President Donald Trump waves as he walks from Marine One to the White House in Washington | Photo: AP/PTI

Wall Street's main indexes fell on Friday after two straight sessions of gains as news that President had contracted Covid-19 stirred up political uncertainty just weeks before the election.

Nine of the 11 major S&P sectors were down, but were off session lows as data showing a slowdown in US job growth in September raised hopes that Washington would agree on a new fiscal stimulus.

Energy, the worst performing sector so far this year, lost 1.5% on the back of a more than 3% drop in oil prices, but utilities and materials edged higher in morning trading.

"have demonstrated an aversion to uncertainty, not so much to one or the other candidate winning," said Roberto Perli, head of global policy research at Cornerstone Macro in Washington.

"However, are also paying attention to the likelihood that another stimulus package will pass soon. If that happens it could offset, at least in part, the uncertainty generated by the Covid-19 news."

Meanwhile, the White House tried to reassure Americans that Trump was still working from isolation after his tweet about him and first lady Melania testing positive for Covid-19 rankled global financial

At 10:43 a.m. ET, the Dow Jones Industrial Average was down 0.90%, the S&P 500 was down 0.87% and the Nasdaq Composite was down 1.17%.

The risk-off mood sparked a broad-based decline, with banks tracking Treasury yields lower and tech mega-caps, which generally tend to outperform at a time of economic uncertainty, shedding more than 1%.

Tesla Inc slipped 2.6% even as it reported record vehicle deliveries in the third quarter.

Trading on turned choppy last month, with the S&P 500 snapping a five-month gaining streak, as economic data indicated a long road to pre-pandemic levels and Congress deliberated over the next round of fiscal stimulus.

With a bipartisan deal eluding House Speaker Nancy Pelosi and the White House, the US House of Representatives on Thursday approved a $2.2 trillion Democratic plan on fiscal aid, but objections from top Republicans are likely to doom the plan in the Senate.

American Airlines and United Airlines, which began laying off 32,000 workers after government funding program expired this week, fell 2.2% and 2.6%, respectively.

"Despite the fact that positive news has been made of ongoing talks between Mnuchin and Pelosi, we've been skeptical that a breakthrough was possible prior to the election," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance in Charlotte, North Carolina.

The CBOE volatility index, known as Wall Street's fear gauge, shot up to a one-week high.

Declining issues outnumbered advancers 2.65-to-1 on the NYSE and 2.43-to-1 on the Nasdaq.

The S&P index recorded two new 52-week highs and one new low, while the Nasdaq recorded 37 new highs and 22 new lows.

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First Published: Fri, October 02 2020. 20:16 IST
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