Investors lost nearly $1.7 trillion this week as stock markets tumbled amid renewed concerns about the coronavirus spreading and pre-election jitters in the U.S.
The Commerce Department reported on Thursday that the nation’s gross domestic product rebounded in the third quarter, although economic growth has recovered only two-thirds of the activity lost since COVID-19 erupted in March.
The Dow Jones industrial average slid as much as 500 points on Friday before paring those losses to close down 0.6%, or 158 points, at 26,502. The S&P 500 dropped 1.2%, and the technology-heavy Nasdaq fell 2.4%.
For all of October, the Dow sank nearly 6%, or 1,600 points, marking the biggest monthly drop since March. The S&P 500 declined 3.5% for the month.
Also driving the losses this month were concerns by investors that some top-performing stocks, especially in tech, are due to lose altitude after soaring in recent months. That piled on top of fears about the potential economic toll of surging coronavirus counts around the world, Washington’s inability to deliver emergency relief for cash-strapped Americans and uncertainty surrounding the upcoming presidential election.
“Today, you have investors who are taking profits in the tech stocks that they expected to do well in the third quarter,” said Sam Stovall, chief investment strategist at CFRA. “And now the focus once again is on COVID-19, and investors are just selling ahead of a weekend.”
The U.S. reported nearly 89,000 new COVID-19 cases on Thursday — a new single-day high during the pandemic. Meanwhile, Wall Street strategists had attributed a rise in stock prices in September and early October partly to expectations of Joe Biden winning the White House, and possibly a sweep of Congress by Democrats.
Much of the market’s focus Friday was on Apple, Amazon, Facebook and Google’s parent company. They are four of the five biggest stocks in the S&P 500 by market value, which gives their movements outsized sway on the index, and they have helped drive Wall Street’s huge rally since March.
Although the four tech giants this week reported quarterly profits that topped analyst forecasts, investors found reasons for concern. Apple dropped 6% after investors fretted over weaker-than-expected revenue from its iPhones and sales in China. Amazon fell 5.5% and Facebook lost 6.7%.
Twitter, another high-profile tech stock, slumped 20.6% on Friday, the largest loss among stocks in the S&P 500. It also reported better-than-expected earnings for the latest quarter, but investors focused instead on its disappointing growth in daily users.
Google-parent Alphabet was an outlier and rose 4.4% after reporting growth in digital ad spending.
Additional reporting provided by the Associated Press.