stocks

Stock Market Today: Stocks Retreat as COVID's Second Wave Grows

Investors let go of stimulus hopes and embraced COVID fears on Monday as cases surged both in the U.S. and abroad.

A number of COVID-related worries got the best of Wall Street on Monday, kicking off what very well could be a volatile seven-session stretch ahead of the elections.

The U.S. on Friday reported 83,757 new cases of COVID-19, easily surpassing its previous high (77,632) reported on July 16; another 80,000 cases were reported on Saturday. This comes as various European countries have imposed new restrictions amid soaring cases there. And financial relief from Washington doesn't appear to be coming anytime soon, with key negotiators suggesting little in the way of progress.

"The double whammy of a stalled stimulus bill and new highs in cases is a harsh reminder of the many worries that are still out there," says Ryan Detrick, chief market strategist at LPL Financial. "Most of the recent economic data has been strong, but when you see parts of Europe going to back to rolling shutdowns, it reminds us this fight is still far from over."

The Dow Jones Industrial Average sank 2.3% to 27,685, with Boeing (BA, -3.9%), Salesforce.com (CRM, -3.4%) and American Express (AXP, -4.1%) suffering some of the deepest losses.

"Today represented a final capitulation in the hope that a stimulus package would be passed before the election – hope that we've felt was misplaced for weeks as the political compromises required to pass such a large package would be difficult in normal circumstances, but given the animosity of the two sides this year seemed extremely unlikely to be made," says Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

Other action in the stock market today:

  • The S&P 500 declined 1.9% to 3,400.
  • The Nasdaq Composite dropped 1.6% to 11,358.
  • Small-cap stocks took it on the chin, with the Russell 2000 off 2.2% to 1,605.

A reminder: This is a heavy week of earnings reports, with a third of the S&P 500's companies announcing quarterly results. You can check out the highlights on our weekly earnings calendar.

Don't Expect a Smooth Ride Soon

Will the Nov. 3 elections set this market straight? Well, it's possible, but what stocks might do depending on who has control of which branch of government probably isn't what you'd expect … and no combination is a guaranteed silver bullet, either, especially given that we remain mired in a simultaneous economic recession and global pandemic.

You could try, as many investors currently are, to jump into so-called Trump stocks and Biden stocks for a post-election swing trade. But if you're not very risk-tolerant, you're still best-served right now by making longer-term investment choices based on factors that are clearly in your control.

Cutting fees, for instance, can result in tens, even hundreds, of thousands of dollars in savings across the course of an investment lifetime. Consider that an investor with $100,000 gaining 8% annually across 30 years, if he or she could cut his average expenses from 1.00% to 0.50%, would save roughly $115,000 in fees during that time.

You can accomplish that via low-cost mutual funds such as our Kip 25 picks, though you can also do so with exchange-traded funds; several ETF families boast low-cost offerings you can use to build a core.

We've previously highlighted several iShares ETFs, and today we're focusing on SPDR, which is famous for its sector funds, plus the first-ever ETF: the SPDR S&P 500 ETF Trust (SPY). Read on as we look at seven dirt-cheap SPDR ETFs you can use to build a traditional portfolio and capture growth as the U.S. equity markets evolve.

Kyle Woodley was long CRM as of this writing.

Most Popular

8 Money Tips for Seniors Suffering from Inflation
Inflation

8 Money Tips for Seniors Suffering from Inflation

This year has been an especially tough one for seniors on fixed incomes. To stay on track, try these eight financial survival tips.
June 26, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
An Easy Way to Find How Much You Will Spend in Retirement
retirement planning

An Easy Way to Find How Much You Will Spend in Retirement

One simple math equation can help you determine where to start building your retirement income plan, and whether your money should last.
June 27, 2022

Recommended

Stock Market Today (6/28/22): Weak Data Opens Trap Door Under Stocks
Stock Market Today

Stock Market Today (6/28/22): Weak Data Opens Trap Door Under Stocks

Slack in manufacturing data and low consumer confidence tanked early-session optimism and left the major indexes with deep losses Tuesday.
June 28, 2022
Stock Market Today (6/27/22): Stocks Limp Out of the Starting Gate
Stock Market Today

Stock Market Today (6/27/22): Stocks Limp Out of the Starting Gate

Monday's session saw stocks give back a little territory from last week's rebound rally, but experts are seeing a few reasons to be optimistic.
June 27, 2022
5 Best Dow Dividend Stocks to Buy Now
blue chip stocks

5 Best Dow Dividend Stocks to Buy Now

This mini-portfolio of blue-chip dividend payers is positioned well to both generate income and tackle headline headwinds for the rest of 2022.
June 27, 2022
Micron Technology Earnings Expected to Show Strong Growth
stocks

Micron Technology Earnings Expected to Show Strong Growth

Our preview of the upcoming week's earnings reports includes Micron Technology (MU), Nike (NKE) and Walgreens Boots Alliance (WBA).
June 27, 2022