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

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."

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

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.