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.

Man looking down against backdrop of negative stock chart
(Image credit: Getty Images)

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 (opens in new tab), -5.5%), Twitter (TWTR (opens in new tab), -5.3%) and Google parent Alphabet (GOOGL (opens in new tab), -5.5%) faced Congressional inquiries about moderating user content.

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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.

Kyle Woodley
Senior Investing Editor, Kiplinger.com

Kyle is senior investing editor for Kiplinger.com. As a writer and columnist, he also specializes in exchange-traded funds. He joined Kiplinger in September 2017 after spending six years at InvestorPlace.com, where he managed the editorial staff. His work has appeared in several outlets, including U.S. News & World Report and MSN Money, he has appeared as a guest on Fox Business Network and Money Radio, and he has been quoted in MarketWatch, Vice and Univision, among other outlets. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.