US STOCKS-Wall Street sinks 3%, Dow at late July lows as pandemic surges

(New throughout, updates prices, market activity and comments
to market close)
By Herbert Lash
NEW YORK, Oct 28 (Reuters) - U.S. stocks tumbled on
Wednesday, with the Dow closing at lows last seen in late July,
as coronavirus cases soared globally and investors also worried
about the possibility of a contested U.S. presidential election
next week.
The spiraling pandemic and Washington's failure to reach a
deal on new fiscal stimulus before the Nov. 3 election drove all
three stock indexes to close almost 3% lower.
Twelve U.S. states set records for hospitalized COVID-19
patients on Tuesday, while Germany and France announced plans to
shut large swathes of public life for a month as the pandemic
surged across Europe. "Obviously the virus is out of control. It's spiking, it's
bad," said Eric Kuby, chief investment officer at North Star
Investment Management Corp in Chicago. "The concept that ...
it's going to disappear is just a faulty assumption."
Shares of hotels, airlines and other companies sensitive to
COVID-19-related turmoil sank. The S&P 1500 airlines index
.SPCOMAIR and leisure related stocks fell, and the energy
index .SPNY slid as oil prices tumbled on fears of a deeper
drop in fuel demand. O/R
With just six days to the election, Wall Street's fear gauge
.VIX spiked to its highest level since June 15. Concerns that
a winner might not be declared the night of Nov. 3 also spurred
the wide sell-off.
Democratic challenger Joe Biden leads President Donald Trump
nationally by 10 percentage points, according to Reuters/Ipsos
polling, but the competition is tighter in swing states, which
will decide the victor. Investors are worried about various potential outcomes: that
the election may be contested; a "blue wave" gives Biden a
victory and his Democrats control of Congress; or that Trump
gets re-elected, said Chris Zaccarelli, chief investment officer
at Independent Advisor Alliance in Charlotte, North Carolina.
"As people run through the likely scenarios of what could
happen with the election, there's no short-term good answer," he
said.
Losses were broad-based with technology stocks .SPLRCT
weighing the most.
The Big Tech companies - Apple AAPL.O , Alphabet GOOGL.O ,
Amazon AMZN.O and Facebook FB.O - which are due to report
results on Thursday, all fell about 3% or more, weighing the
most on the S&P 500.
Unofficially, the Dow Jones Industrial Average .DJI fell
939.13 points, or 3.42%, to 26,524.06, the S&P 500 .SPX lost
119.26 points, or 3.52%, to 3,271.42 and the Nasdaq Composite
.IXIC dropped 426.48 points, or 3.73%, to 11,004.87.
Of the 206 S&P 500 companies that have reported
third-quarter earnings so far, about 83% have topped
expectations, according to Refinitiv data. But earnings on
average are expected to fall 14.8% from a year earlier.
Microsoft Corp 's MSFT.O quarterly results surpassed
analysts targets, benefiting from a pandemic-driven shift to
working from home and online learning. Its shares, however,
fell about 4% after rising nearly 35% so far this year.
General Electric Co GE.N was one bright spot, jumping 8%
after posting a surprise quarterly profit and a positive cash
flow on the back of cost cuts and improvements in its power and
renewable energy businesses. GE was the largest
percentage gainer on the S&P 500.