Wall Street sell-off gains steam, Dow falls 350 points and heads for its worst week since March

Stocks fell on Friday, with Wall Street set to wrap up a difficult week as U.S. fiscal stimulus talks broke down, coronavirus cases rose and a slew of companies reported quarterly earnings.

The Dow Jones Industrial Average traded 350 points lower, or 1.3%. The S&P 500 dipped 1.5% and the Nasdaq Composite pulled back 2.3% as some tech companies struggled after reporting earnings.

The Dow and S&P 500 are down 7.2% and 6%, respectively, for the week and were on track for their biggest weekly losses since March. The Nasdaq has lost more than 5% over that time period and was also headed for its worst one-week performance since March.

Earlier in the week, Senate Majority Leader Mitch McConnell adjourned the Senate until Nov. 9, making it unlikely for Democrats and Republicans to reach a deal on new fiscal stimulus. Treasury Secretary Steven Mnuchin, meanwhile, accused House Speaker Nancy Pelosi of miscasting the state of the stalled negotiations, calling it a “political stunt.”

Volatility was also elevated as investors grappled with rising new cases of the coronavirus in the U.S. and abroad. The seven-day average of new coronavirus cases in the U.S. hit an all-time high this week, according to data from Johns Hopkins University. In Europe, Germany and France announce new lockdown measures to curb the virus’ spread.

The Cboe Volatility Index (VIX), also known as Wall Street’s “fear gauge,” touched a high of 41.2 Thursday, its highest level since June 15, before easing from those levels on Friday.

“Massive policy stimulus, positive medical developments and high hopes for a return to pre-pandemic economic activity levels have provided a solid boost to equity markets,” strategists at MRB Partners wrote in a note. “However, mounting new economic restrictions, particularly in Europe, despite being forecastable and in lagged response to the re-acceleration in COVID-19 infections, only caught investors’ attention this week, triggering sharp losses.”

The Dow and the S&P 500 are also set to post their second straight month of losses as Wall Street wraps up a turbulent October. The 30-stock average is down 4% this month, and the S&P 500 has lost 1.5%. The Nasdaq outperformed, rising just 0.2% in the same period.