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US STOCKS-Wall St slumps on rising virus cases, fading stimulus hopes

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Credit: Carlo Allegri - Reuters / stock.adobe.com

By Medha Singh and Shivani Kumaresan

Oct 26 (Reuters) - U.S. stocks fell sharply on Monday as surging coronavirus cases and a stalemate in Washington over the next fiscal aid bill darkened the economic outlook in the run up to the Nov. 3 presidential election.

New infections have touched record levels in the United States, with El Paso in Texas asking citizens to stay at home for the next two weeks. In Europe, Italy and Spain imposed new restrictions.

Travel-related stocks that are vulnerable to COVID-19 related curbs including American Airlines AAL.O, United Airlines Holdings UAL.O and Booking Holdings Inc BKNG.O fell between 3% and 4.5%.

All major S&P sectors were trading lower with economically-sensitive energy .SPNY, industrials .SPLRCI and financials .SPSY recording the steepest percentage declines.

Wall Street's main indexes had ended lower last week as investors closely monitored talks over the next round of fiscal package, while economic data pointed to a stalling recovery.

U.S. House Speaker Nancy Pelosi on Sunday said the Trump administration was reviewing the latest proposal for COVID-19 relief over the weekend and that she expected a response on Monday.

"The harsh reality is it's going to be very difficult to get as much as the $2 trillion deal even if they have something today or tomorrow," said Ryan Detrick, senior market strategist at LPL Financial, North Carolina.

"It's not going to happen until after the election."

Meanwhile, more than 59.1 million Americans have already voted in person or by mail as President Donald Trump and Democratic challenger Joe Biden enter their final week of campaigning.

It is also one of the busiest week of the third-quarter earnings season that will see results from mega-cap U.S. tech firms including Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Google-parent Alphabet Inc GOOGL.O and Facebook Inc FB.O.

Of the 135 companies in the S&P 500 that have reported earnings so far, 83.7% of them have beaten Wall Street expectations, according to Refinitiv data.

At 09:41 a.m. ET, the Dow Jones Industrial Average .DJI fell 367.31 points, or 1.32%, to 27,968.26, the S&P 500 index .SPX lost 32.08 points, or 0.93%, to 3,433.31 and the Nasdaq Composite index .IXIC lost 34.94 points, or 0.30%, to 11,513.34.

Software company Oracle Corp ORCL.N fell 3% after its German rival SAP SAPG.DE abandoned medium-term profitability targets and cautioned its business would take longer than expected to recover from the pandemic hit.

Hasbro Inc HAS.O fell about 7% despite beating analysts' estimates for quarterly revenue and profit.

Declining issues outnumbered advancing ones by 6.6-to-1 on the NYSE and 0.3-to-1 on the Nasdaq.

The S&P index recorded two new 52-week highs and no new low, while the Nasdaq recorded 20 new highs and 10 new lows.

(Reporting by Medha Singh and Shivani Kumaresan in Bengaluru; Editing by Arun Koyyur)

((Medha.Singh@thomsonreuters.com; within U.S. +1646 223 8780, outside U.S. +91 80 6182 2802; Twitter: https://twitter.com/medhasinghs;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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