Dow drops 650 points as S&P 500, Nasdaq post worst day since September

This week is the busiest for S&P 500 earnings

Stocks ended the Monday session sharply lower as traders expressed concerns on whether U.S. lawmakers would pass another fiscal stimulus bill to support the economy and as Europe put additional restrictions in place to fight the COVID-19 pandemic.

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TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES30046.24+454.97+1.54%
I:COMPNASDAQ COMPOSITE INDEX12036.785414+156.15+1.31%
SP500S&P 5003635.41+57.82+1.62%

The Dow Jones Industrial Average fell about 650 points, clawing back from session lows of over 950 points or nearly 3%.

Meanwhile, the S&P 500 and Nasdaq Composite sank 1.8% and 1.6%, respectively. It marked the worst day since September for both.

Oil fell below the $40 per barrel level, a three-week low, making energy stocks the worst-performing group in the S&P along with industrials.

TickerSecurityLastChangeChange %
USOUNITED STATES OIL FUND L.P.30.80+1.28+4.34%
XLEENERGY SELECT SECTOR SPDR ETF40.31+1.97+5.14%
XLIINDUSTRIAL SELECT SECTOR SPDR ETF89.65+1.54+1.75%

Investors are also preparing for the busiest week for S&P 500 earnings, with over one-third of companies reporting, including Amazon, Apple, Caterpillar and Exxon Mobil, to name a few.

Tuesday investors will hear from Caterpillar, Merck and Pfizer.

TickerSecurityLastChangeChange %
CATCATERPILLAR INC.176.90+2.12+1.21%
MRKMERCK & CO. INC.80.14-0.14-0.17%
PFEPFIZER INC.36.60+0.08+0.22%

On the stimulus front, Speaker of the House Nancy Pelosi and Treasury Secretary Mnuchin spoke for 52 minutes on Monday, yet failed to seal a deal.

This came after Pelosi and White House chief of staff Mark Meadows both accused the other side of moving the goalposts over the weekend. Pelosi, however, added that an agreement "could happen" this week.

STOCKS END MIXED AS ASTRAZENECA RESTARTS COVID-19 TRIALS, J&J TO FOLLOW

On Sunday, the U.S. reported 60,789 new cases of coronavirus, down from the prior few days, but still rising. Deaths in the U.S. topped 225,000, the most of any country, according to data compiled by Johns Hopkins University.

In Europe, the Italian government said it would close bars and restaurants at 6 p.m., while gyms and movie theaters were being shut to fight off the second wave of COVID-19 infections. Separately, Spain said it would introduce a curfew, starting at 11 p.m. The German DAX fell 2.7%, while the French CAC 40 dropped 1.2% and the U.K. FTSE 100 declined 0.6%.

EARNINGS, ECON ON TAP

TickerSecurityLastChangeChange %
HASHASBRO INC.92.10-0.52-0.56%
TWLOTWILIO INC292.00-9.72-3.22%
NXPINXP SEMICONDUCTORS N.V.158.47+2.56+1.64%

New home sales for September unexpectedly declined, coming in at 959,000, versus the prior reading of 994,000. Economists surveyed by Refinitiv had expected sales to climb to 1.025 million.

However, earnings season will kick into high gear, with Twilio Inc. and NXP Semiconductor all set to share results.

Hasbro Inc. shares were falling despite the toy and games company posting better-than-expected revenue.

TickerSecurityLastChangeChange %
SAPSAP SE116.80-0.59-0.50%

SAP shares plummeted after the European business software maker lowered its outlook for 2020, noting the coronavirus pandemic has pushed back investments by its customers.

TickerSecurityLastChangeChange %
MSFTMICROSOFT CORP.213.86+3.75+1.78%
CRMSALESFORCE.COM260.84+3.20+1.24%

Other enterprise-focused tech stocks, including Microsoft Corp. and salesforce.com, fell in tandem.

TickerSecurityLastChangeChange %
DNKNDUNKIN BRANDS GROUP106.26+0.04+0.04%

Shares of Dunkin' Brands soared after the company held talks to sell itself to Inspire Brands, FOX Business confirmed. The deal was first reported by The New York Times.

TickerSecurityLastChangeChange %
BABAALIBABA GROUP HOLDING LTD279.96+9.85+3.65%

Ant Group, the Chinese financial technology company, said it would raise $34.5 billion in a dual-listed initial public offering in Hong Kong and China, the largest IPO of all time. Chinese e-commerce giant Alibaba owns roughly one-third of Ant Group, according to filings.

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In commodities, gold traded at $1,902.70 an ounce.

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