Reuters | Oct 31, 2020 05:00
(Corrects final bullet point to "Dow down ... S&P 500 down "
instead of "up", percentages unchanged)
* Twitter slumps as user growth disappoints
* Apple, Amazon, Facebook drop after results
* Alphabet rises as businesses resume ad spending
* Dow down 0.59%, S&P 500 down 1.21%, Nasdaq down 2.45%
By Herbert Lash
NEW YORK, Oct 30 (Reuters) - U.S. stock indexes closed lower
on Friday to cap Wall Street's biggest weekly sell-off since
March, as losses in richly priced tech heavyweights, a record
rise in coronavirus cases and jitters over the presidential
election snuffed investor sentiment.
The pandemic pushed U.S. hospitals to the brink of capacity
as coronavirus cases surpassed 9 million, while the prospect of
wider COVID-19 restrictions in Europe raised concerns about the
economic recovery. The CBOE volatility index .VIX closed just below a 20-week
high, a sign of investor jitters ahead of the final weekend
before Election Day on Tuesday. The main indexes pared steeper
losses toward the closing bell, with the Dow down less than 1%.
"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
The S&P 500 has fallen about 8.9% since hitting an all-time
high in early September in a rally driven by the tech mega caps
whose quarterly results this week failed to meet highly
Apple Inc AAPL.O tumbled 5.6% after it posted the steepest
drop in quarterly iPhone sales in two years due to the late
launch of new 5G phones. Amazon.com Inc AMZN.O slid 5.45% after it forecast a jump
in costs related to COVID-19, while Facebook Inc FB.O fell
6.3% as it warned of a tougher 2021. "All these names are eventually going to be repriced,
they're all ridiculously valued. It's just that I don't know
when and I don't know from what stratospheric valuation they
inevitably reprice," said David Bahnsen, chief investment
officer at The Bahnsen Group in Newport Beach, California.
Communication services .SPLRCL got a boost from a jump in
shares of Alphabet Inc GOOGL.O after the Google parent beat
estimates for quarterly sales as businesses resumed advertising.
Google may have benefited as it has been trading at about 36
times earnings, far less than the 119 times earnings valuation
of Amazon, Bahnsens said.
"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.
Republican President Donald Trump has consistently trailed
Democratic challenger Joe Biden in national polls for months,
but polls have shown a closer race in the most competitive
states that could decide the election. The Dow Jones Industrial Average .DJI fell 157.51 points,
or 0.59%, to 26,501.6. The S&P 500 .SPX lost 40.15 points, or
1.21%, to 3,269.96 and the Nasdaq Composite .IXIC dropped
274.00 points, or 2.45%, to 10,911.59.
For the week, the Dow fell 6.5&, the S&P 500 5.6% and the
Nasdaq 5.5%. For the month, the Dow slid 4.6%, the S&P 500 2.8%
and the Nasdaq 2.3%.
Volume on U.S. exchanges was 10.31 billion shares.
The third-quarter earnings season is almost past its halfway
mark, with about 86.2% of S&P 500 companies topping earnings
estimates, according to Refinitiv data. Overall, profit is
expected to fall 10.3% from a year earlier.
Twitter Inc TWTR.N , the largest S&P 500 decliner by
percentage, slumped 21.1% after the micro-blogging site added
fewer users than expected and warned the U.S. election could
affect ad revenue. Declining issues outnumbered advancing ones on the NYSE by a
1.83-to-1 ratio; on Nasdaq, a 2.63-to-1 ratio favored decliners.
The S&P 500 posted three new 52-week highs and two new lows;
the Nasdaq Composite recorded 22 new highs and 83 new lows.
Written By: Reuters
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