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Tech slide hits Wall Street as coronavirus cases spiral

The CBOE volatility index held at a 20-week high ahead of the final weekend before Election Day on Tuesday.

October 30, 2020 / 10:53 PM IST

Wall Street's major indexes tumbled on October 30, 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 tumbled about 5.5 percent after it posted the steepest drop in quarterly iPhone sales in two years due to the late launch of new 5G phones.

Close Inc fell 4.7 percent after it forecast a jump in costs related to COVID-19, while Facebook Inc shed 5.7 percent 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 percent jump in shares of Alphabet 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 percent to 26,419.29, the S&P 500 lost 41.73 points, or 1.26 percent to 3,268.38 and the Nasdaq Composite lost 237.30 points or 2.12 percent to 10,948.30.

The third-quarter earnings season is past its halfway mark, with about 86.2 percent of S&P 500 companies topping earnings estimates, according to Refinitiv data. Overall, profit is expected to fall 10.3 percent from a year earlier.

Twitter Inc slumped about 20 percent after the micro-blogging site added fewer users than expected and warned the U.S. election could impact ad revenue.

AbbVie Inc gained 4.3 percent after the drugmaker raised its full-year profit forecast, bolstered by signs of recovery in demand for its Botox injection.

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.

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