stocks

Stock Market Today: Dow Drops 943 Points as Investors Storm the Exits

America's major indices suffered significant drops Wednesday as COVID-19's cloud of uncertainty cast a larger shadow over the economy.

So much for the market's best day of the year. Oct. 28, on average the S&P 500's best-performing day over the past 70 years, was instead one of 2020's worst as COVID-19 concerns continued to flare up in the U.S. and Europe.

Cities such as Chicago and Newark are renewing restrictions on businesses and public gatherings amid not just record-high new caseloads in America, but rising hospitalizations and deaths as well. In Germany, restaurants and theaters will be shut down for four weeks, and other European countries are stepping up their own measures to fend off a second wave.

Big Tech suffered from additional downward pressure, as the CEOs of Facebook (FB, -5.5%), Twitter (TWTR, -5.3%) and Google parent Alphabet (GOOGL, -5.5%) faced Congressional inquiries about moderating user content.

The S&P 500 did not come close to meeting its average 0.54% gain on Oct. 28, instead plunging 3.5% to 3,271.

Other action in the stock market today:

  • The Dow Jones Industrial Average declined 3.4% to 26,519.
  • The Nasdaq Composite lost 3.7% to 11,004.
  • The Russell 2000, best of the four major indices Wednesday, still dropped 3.0% to 1,543.

For Some Investors, It Might Be Time to Let Go

"We are experiencing the storm before the calm," Jamie Cox, managing partner for Virginia-based Harris Financial Group, says about today's market selloff, adding that "November has the potential to settle some big, outstanding issues."

But just how stormy could things get? One particularly bearish outlook comes from James McDonald, CEO of California-based Hercules Investments: "Expectations that COVID-19 would be under control by now have vanished, and we see stocks falling by another 10% to 20% from here."

"We believe that if the S&P 500 breaks below 3,200 before the election, its next move may be down another 12% to 2,890."

Even if the market as a whole doesn't plunge that much in the uncertain days, weeks and months to come, many weaker stocks might drop calamitously.

Whether you want to raise cash to buy dips or simply want to limit your downside exposure, it pays to prune stocks in your portfolio that are liable to underperform the market. These nine stocks, for instance, have analysts raising caution flags.

Don't forget to scan the dividend-income portion of your portfolio, too. These 15 dividend-paying stocks have largely struggled in 2020, and their payouts, even while generous in some cases, simply don't appear to be enough to compensate investors for the mounting risks they still face.

Kyle Woodley was long FB as of this writing.

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
7 Best Commodity Stocks to Play the Coming Boom
commodities

7 Best Commodity Stocks to Play the Coming Boom

These seven commodity stocks are poised to take advantage of a unique confluence of events. Just mind the volatility.
September 8, 2021
Stock Market Holidays in 2021
Markets

Stock Market Holidays in 2021

Is the stock market open today? Take a look at which days the NYSE, Nasdaq and bond markets take off in 2021.
September 2, 2021

Recommended

Stock Market Today (9/21/21): Stocks Finish Mixed Ahead of Fed
Stock Market Today

Stock Market Today (9/21/21): Stocks Finish Mixed Ahead of Fed

The latest Fed policy announcement is due out tomorrow afternoon.
September 21, 2021
All 30 Dow Jones Stocks Ranked: The Pros Weigh In
blue chip stocks

All 30 Dow Jones Stocks Ranked: The Pros Weigh In

The Dow Jones Industrial Average is made up of 30 blue chips that are tops in their industries. But some Dow Jones stocks are better opportunities tha…
September 21, 2021
Stock Market Today (9/20/21): China's Evergrande Crisis Knocks 614 Points Off Dow
Stock Market Today

Stock Market Today (9/20/21): China's Evergrande Crisis Knocks 614 Points Off Dow

A possible debt default for a Chinese real estate giant sent shockwaves across global markets and put a dent in U.S. stocks Monday.
September 20, 2021
China's Evergrande Crisis: A Real Threat to U.S. Stocks?
Foreign Stocks & Emerging Markets

China's Evergrande Crisis: A Real Threat to U.S. Stocks?

A looming debt default by Chinese real estate titan Evergrande is sparking fears of global contagion and knocking stocks from their perches.
September 20, 2021