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Wall Street slumps as markets tumble worldwide with the Dow dropping 509.72 points after earlier 942 point slide and the S&P 500 recording a four day losing streak

 Wall Street's main indexes tumbled on Monday as concerns about new lockdowns in Europe and possible delays in fresh stimulus from Congress raised fears the U.S. economy faces a longer road to recovery than previously hoped for. 

The drops began in Asia as soon as trading opened for the week, and they accelerated in Europe on worries about the possibility of tougher restrictions there to stem rising coronavirus counts. In the U.S., stocks and Treasury yields weakened, while prices sank for oil and other commodities that a healthy economy would demand.

The S&P 500 fell 38.41 points, or 1.2 per cent, to 3,281.06. It extends the index's losing streak to four days, its longest since stocks were selling off in February on recession worries. But a last-hour recovery helped the index more than halve its loss of 2.7 per cent from earlier in the day.

The Dow Jones Industrial Average fell 509.72, or 1.8 per cent, to 27,147.70 after coming back from an earlier 942 point slide. The Nasdaq composite slipped 14.48, or 0.1 per cent, to 10,778.80 after recovering from a 2.5 per cent drop.

Wall Street has been shaky this month, and the S&P 500 has dropped 8.4 per cent since hitting a record September 2 amid a long list of worries for investors. 

Chief among them is fear that stocks got too expensive when coronavirus counts are still worsening, Congress is unable to deliver more aid for the economy, U.S.-China tensions are rising and a contentious U.S. election is approaching. 

Investors should expect the stock market to stay volatile, perhaps through the November elections, as they wait for these questions to shake out, said Jason Draho, head of asset allocation for the Americas at UBS Global Wealth Management.

Monday's selling was exacerbated by worries about the possibility of more business restrictions in Europe, particularly as the United States heads into flu season, Draho said, and 'some investors may be stepping aside.'

David Joy, chief market strategist at Ameriprise Financial, noted how Monday's sharpest drops were concentrated in areas of the market most closely tied to the economy's strength, such as energy companies and raw-material producers.

'It seems to be a broader expression of worry about the economy,' he said. 


Traders wearing masks work, on the first day of in person trading since the closure during the outbreak of the coronavirus disease (COVID-19) on the floor at the NYSE on May 26

Traders wearing masks work, on the first day of in person trading since the closure during the outbreak of the coronavirus disease (COVID-19) on the floor at the NYSE on May 26

 Bank stocks took sharp losses after a report alleged that several continue to profit from illicit dealings with criminal networks despite U.S. crackdowns on money laundering.

Shares of electric and hydrogen-powered truck startup Nikola plunged 19.3 per cent after its founder resigned as executive chairman and left its board amid allegations of fraud. The company has called the allegations false and misleading.

General Motors, which recently signed a partnership deal where it would take an ownership stake in Nikola, fell 4.8 per cent.

Investors are also worried about the diminishing prospects that Congress may soon deliver more aid to the economy. Many investors call such support crucial after extra weekly unemployment benefits and other stimulus expired. But partisan disagreements have held up any renewal of what's known as the CARES Act.

'The stimulus money from the CARES Act, the impact of that, is running off and there doesn't seem to be any urgency in Washington to get another package together,' said Joy of Ameriprise Financial..

Partisan rancor is only continuing to rise, deflating hopes further. The sudden vacancy on the Supreme Court following the death of Justice Ruth Bader Ginsburg is the latest flashpoint dividing the country.

DOW takes a tumble as NYSE opens
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People wearing face masks walk past a bank's electronic board showing the Hong Kong share index at Hong Kong Stock Exchange Monday Asian stock markets were mostly lower Monday after Wall Street declined for a third week and Britain reported a rise in coronavirus infections

People wearing face masks walk past a bank's electronic board showing the Hong Kong share index at Hong Kong Stock Exchange Monday Asian stock markets were mostly lower Monday after Wall Street declined for a third week and Britain reported a rise in coronavirus infections

Tensions between the world's two largest economies are also weighing on markets. 

President Donald Trump has targeted Chinese tech companies in particular, and the Department of Commerce on Friday announced a list of prohibitions that could eventually cripple U.S. operations of Chinese-owned apps TikTok and WeChat. The government cited national security and data privacy concerns.

That raises the threat of Chinese retaliation against U.S. companies.

A U.S. judge over the weekend ordered a delay to the restrictions on WeChat, a communications app popular with Chinese-speaking Americans, on First Amendment grounds.

Trump also said on Saturday he gave his blessing to a proposed deal between TikTok, Oracle and Walmart to create a new company that would likely be based in Texas.

Trump says TikTok deal 'working its way through'
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Layered on top of all those concerns for the market is the continuing coronavirus pandemic and its effect on the global economy.

On Sunday, the British government reported 4,422 new coronavirus infections, its biggest daily rise since early May. An official estimate shows new cases and hospital admissions are doubling every week.

Prime Minister Boris Johnson later this week is expected to announce a slate of short-term restrictions that will act as a 'circuit breaker' to slow the spread of the disease. The number of cases has been rising quickly in many European countries and while authorities don't seem ready to return to the tough restrictions on public life that they imposed in the spring, the new wave of the pandemic threatens the economic outlook.

The FTSE 100 in London dropped 3.4 per cent. Other European markets were similarly weak. The German DAX lost 4.4 per cent, and the French CAC 40 fell 3.7 per cent.

In Asia, Hong Kong's Hang Seng dropped 2.1 per cent, South Korea's Kospi fell 1 per cent and stocks in Shanghai lost 0.6 per cent.

The yield on the 10-year Treasury fell to 0.66 per cent from 0.69 per cent late Friday.

September's losses for markets are reversing months of remarkable gains. Beginning in late March, when the Federal Reserve and Congress pledged massive amounts of support for the economy, the S&P 500 erased its nearly 34 per cent in losses caused by the pandemic. Signs of budding economic improvements accelerated the gains, but growth has slowed recently.

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