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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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.
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.
-
Markets Are Quiet Ahead of Fed Day: Stock Market TodayInvestors, traders and speculators appear to be on hold amid an unusually fraught Fed meeting.
-
Quiz: Test Your Knowledge of the OBBB, Wealth Transfer and Early RetirementQuiz The financial professionals who contribute to Kiplinger's Adviser Intel recently wrote about the OBBB's impact on retirement, how to ensure your wealth passes to your family and early retirement questions.
-
Stocks Grind Up to New All-Time Highs: Stock Market TodayUnitedHealth stock led the Dow Jones Industrial Average amid increasing signs the labor market has not been well for months.
-
Markets Prepare for August Inflation Data: Stock Market TodayApple CEO Tim Cook is still important, but price action this week is as much about incoming inflation data ahead of next week's Fed meeting.
-
Big Tech Names Rise Above Broad Weakness: Stock Market TodaySome familiar names enjoyed solid rallies on the resolution of outstanding questions, but macro uncertainty hangs over the broader market.
-
Alphabet Stock Pops After Google Antitrust Ruling: What to KnowGOOGL stock is soaring Wednesday after a judge ruled that Alphabet does not have to divest its Chrome browser.
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
AI Start-ups Are Rolling in CashThe Kiplinger Letter Investors are plowing record sums of money into artificial intelligence start-ups. Even as sales grow swiftly, losses are piling up for AI firms.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have TodayUNH stock was a massive market beater for ages — until it wasn't.
-
Dow Rips 846 Points to New All-Time High: Stock Market TodayFed Chair Jerome Powell seems ready to cut interest rates in the fall but will still rely on incoming economic data about inflation and employment.
