# Dow skids 800 points as COVID cases and election concerns rise

Wednesday’s losses come after the Dow on Tuesday fell 222.19 points, or 0.8%, to end at 27,463.19, while the S&P 500 fell 0.29 point, or 0.3%, to finish at 3,390.68. The Nasdaq Composite bucked the weaker trend to rise 72.41 points, or 0.6%, to close at 11,431.35.

What’s driving the market?

Stocks came under heavy selling pressure Wednesday as Germany and France announced further restrictions on business activity in an effort to contain the rise in COVID-19 cases and the U.S. saw the number of new cases hit records.

New daily U.S. cases rose back above 70,000 on Tuesday after hitting a record above 80,000 at the end of last week. The U.S. has reported a record 500,000 cases over the past week, the New York Times reported, while the seven-day average of confirmed new cases hit a record of 69,967 on Monday, according to a Wall Street Journal analysis of data from Johns Hopkins University.

“In 36 states, the hospitalization rate for the coronavirus increased by at least 5% over in the past seven days,” said David Madden, market analyst at CMC Markets. “Traders keep an eye on the hospitalization rates because the authorities want to ensure the health care services aren’t overwhelmed — that can often be a trigger to bringing in tougher restrictions.”

Read: Stock-market rout: Did rising COVID cases really surprise investors?

Jitters ahead of the Nov. 3 presidential election, now less than a week away, also were contributing to volatility, analysts said. Democratic challenger Joe Biden has maintained a lead over President Donald Trump in the polls, but the race has tightened. An unclear or contested election result would be a potential worst-case scenario.

“I think we have a good two or three months of volatility ahead of us before it gets closer to normal levels,” said Randy Frederick, vice president of trading and derivatives at Schwab’s center for financial research, of the potential impact of election-related turmoil on markets. “If there is a very decided, solid victory and no possibility of people questing it, maybe things settle sooner.”

Frederick said investors, until about a week ago, had been taking positions based on a clear election outcome. “But it’s hard to say at this point,” he told MarketWatch. “In the past week or so, it’s going back to the other direction of no one knows. That’s a prefect recipe for volatility.”

Meanwhile, the chief executives of Alphabet Inc.’s
GOOG,
-5.00%

GOOGL,
-5.12%
Google, Facebook Inc.
FB,
-4.81%,
and Twitter Inc.
TWTR,
-4.92%
took heat during a Senate Commerce subcommittee hearing Wednesday about whether social-media sites should be held liable for content posted by their users.

See: Facebook, Google, Twitter CEOs take heat in Senate over content

Investors also continue to wade through the busiest week of the earnings reporting season, including better-than-expected results late Tuesday from software giant Microsoft Corp.
MSFT,
-3.97%,
though the company’s forecast came in shy of estimates. Shares were down 3.8%.

In economic data, the government said the trade deficit narrowed to $79.4 billion in September. Economists surveyed by MarketWatch had forecast it would widen to $83.5 billion from $82.9 billion a month earlier.

See: Europe is now closing its doors, but its recovery had been running ahead of the U.S.

Which companies are in focus?

• FireEye Inc.
  FEYE,
  +0.53%
  shares were up 0.6% after reporting record financial results and an increased annual forecast late Tuesday.

• Juniper Networks Inc.
  JNPR,
  -6.86%
  shares fell 6.7% after reporting results late Tuesday that beat Wall Street forecasts for earnings and revenue.

• General Electric Co.
  GE,
  +8.23%
  shares surged more than 9% after the industrial conglomerate reported a surprise third-quarter adjusted profit and positive cash flow, as revenue fell less than forecast.

• Dine Brands Global Inc. 
  DIN,
  +2.19%
  shares rose 1.4% after the IHOP and Applebee’s parent reported third-quarter earnings that beat expectations and announced a review of IHOP restaurants.

• Shares of United Parcel Service Inc.
  UPS,
  -7.00%
  were down nearly 7% after the package delivery company reported third-quarter profit and revenue that topped expectations, with all three business segments beating forecasts.

• Automatic Data Processing Inc.
  ADP,
  +7.24%
  bucked the downtrend Wednesday, with shares up 7.3% after reporting earnings before the bell. The payroll processor now sees FY21 EPS between flat and down 4%.

• Shares of Boeing Co.
  BA,
  -3.55%
  fell 3.3% after the Dow component notched a narrower-than-expected loss, but missed expectations on revenue.

How are other markets trading?

In global equities, the Shanghai Composite
SHCOMP,
+0.45%
 closed 0.5% higher, while Hong Kong’s Hang Seng Index
HSI,
-0.31%
 and Japan’s Nikkei 225 Index
NIK,
-0.28%
 both declined 0.3%. The pan-European Stoxx 600 Europe
SXXP,
-2.95%
 closed out its worst day in about a month, tumbling 3% and London’s FTSE 100
UKX,
-2.55%
fell 2.6%.

Oil futures sank, with the U.S. benchmark
CL00,
-5.83%
 down 5.8% to trade near $37.29 a barrel as rising coronavirus cases dented expectations for demand. Gold futures
GCZ20,
-1.62%
 settled down 1.6%, at $ 1,879.20 an ounce, as the dollar gained and traders sold gold to raise funds for margin calls.

The ICE U.S. Dollar Index
DXY,
+0.52%
 a measure of the currency against a basket of six major rivals, was up 0.5%.

The yield on the 10-year Treasury note
TMUBMUSD10Y,
0.773%
was 1.5 basis points lower at 0.77%, as traders piled into assets perceived as safer. Yields and bond prices move in opposite directions.

Read next: Something good in 2020? The ‘January effect’ may come early, these strategists say

William Watts contributed reporting